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In 1871, at age twenty-seven, Benz founded his first company in Mannheim, an iron foundry and mechanical workshop. It was a joint venture with August Ritter, a partnership that proved disastrous within the first year. In 1872, Benz married Bertha Ringer, with whom he had five children: Eugen, Richard, Clara, Thilde, and Ellen.

By 1878, Benz was developing new engines and earning patents. That year, he created a reliable two-stroke engine, and he was issued a patent for this engine in 1879. He also registered a number of other inventions, including the speed regulation system, the carburetor, the clutch, the spark plug, and the water radiator.

Because of his factory's high production costs, the Mannheim banks demanded that Benz's factory be incorporated, and in 1882 it became Gasmotoren-Fabrik Mannheim. In 1883, he left the company, disgruntled that he was barely consulted for technical decisions. That year, he established Benz and Company, producing industrial machines with Max Rose and Friedrich Wilhelm Esslinger, owners of a bicycle repair shop in Mannheim.

Benz turned to designing a vehicle with an internal combustion engine. By 1885, he had created the first practical gasoline-powered automobile, the Benz Patent Motorwagen, and was granted a patent in 1886.

By 1890, Benz and Company had grown to fifty employees and expanded to a larger facility. In 1893, Benz designed the Victoria, a two-passenger automobile with double-pivot steering. The following year, the Velo model was improved, and in 1895 Benz created the first truck in history. In 1896, he was granted a patent for the horizontally opposed piston engine.

By the early twentieth century, competition with Daimler-Motoren-Gesellschaft (DMG), which produced Mercedes cars, had become inevitable. It is not certain whether Benz and Gottlieb Daimler knew of each other's accomplishments, as Daimler died in March, 1900. In 1903, Benz retired from his company out of protest when French engineers at the Mannheim plant were hired. These engineers were supposed to help restore the competitiveness of Benz's company. . .

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