Not Austria, and definitely not Australia—-so where was Mercedes founded? Mercedes was founded in Stuttgart, Germany. Mercedes-Benz is the offspring of two rival German car manufacturers.
At first, Karl Benz and Gottlieb Daimler were competitors in the early 20th century German car industry. Then one day they realized they were stronger together and merged their two companies to create Daimler-Benz, the first producer of the Mercedes-Benz branded vehicles. Ever since, Mercedes-Benz has led the world in luxury car production.