In September 1936, the motor racing association AIACR announced details of the new Grand Prix formula that would take effect from 1938. The key points: a maximum displacement of 3 litres for supercharged engines or 4.5 litres for naturally aspirated engines; and a weight of at least 400 and at most 850 kilograms, depending on the displacement. These requirements made necessary the development of a completely new vehicle. The 1937 season was still in full swing as work began at Mercedes-Benz to develop the car for the following year’s racing.

There was certainly no shortage of ideas from the racing design engineers: they considered the idea of a W 24 naturally aspirated engine with three banks of eight cylinders each, as also of a rear-positioned engine, direct petrol injection and a fully streamlined body. In the end, primarily in order to manage the thermal conditions, the engineers opted for a V12 with a V-angle of 60 degrees, developed in-house by Daimler-Benz specialist engineer Albert Heess. The cylinders were combined in groups of three in welded-on steel plate cooling jackets with non-removable heads. Powerful pumps propelled 100 litres of oil per minute through the engine, which weighed around 260 kilograms. Compression was provided initially by two single-stage superchargers, which were replaced in 1939 with a single two-stage unit.

By January 1938, the engine was being tested on the test bench. The first completely trouble-free test took place on 7 February, during which it delivered 427 hp (314 kW) at 8000 rpm. For the first half of the season the drivers had an average of 430 hp (316 kW) at their disposal, which by the end of the season had climbed to more than 468 hp (344 kW). The most powerful version of the engine, with 483 hp (355 kW), was used by Hermann Lang at the French Grand Prix in Reims. This was also the first Mercedes-Benz racing car to feature a five-speed transmission.

Chassis engineer Max Wagner had a much easier job of it than his colleagues on the engine development side. He was able to adopt the advanced chassis architecture of the W 125 from the previous year virtually unchanged, although he did take the opportunity to improve the torsional rigidity of the frame by a further 30 per cent. The V12 engine was set very low, with the air intakes for the carburettors peeping out from behind the centre of the radiator grille; the grille itself became wider and wider as the beginning of the season approached. The driver sat on the left, next to the propshaft, with the overall result that the W 154 looked as though it was crouching low over the asphalt. In silhouette, the tops of the wheels appeared to stand higher than the contours of body. As well as enhancing the dynamic look of the car, this also significantly lowered the centre of gravity. The works drivers, whose experience technical boss Rudolf Uhlenhaut trusted implicitly, were immediately impressed by the road-holding qualities of the new racer W 154.

The W 154 was indeed able to outshine the excellent performance set by its predecessors: this Silver Arrow gave the Mercedes-Benz racing department its greatest number of victories during this era. This first race of the 1938 season nevertheless ended in disappointment: on the twisting circuit in Pau, France, the car was unable to display its full potential and was set back by a refuelling stop. But things improved rapidly thereafter. The Tripoli Grand Prix resulted in a triple victory for Lang, von Brauchitsch, and Caracciola, a feat that was repeated at the French Grand Prix in the sequence von Brauchitsch, Caracciola, and Lang. The British driver Richard Seaman, who had joined the team in 1937, won the German Grand Prix on the Nürburgring ahead of the car driven jointly by Caracciola und Lang, while Hermann Lang went on to win the Coppa Ciano in Livorno and Rudolf Caracciola the Coppa Acerbo at Pescara. At the Swiss Grand Prix, the W 154 once again took the first three places (Caracciola, Seaman, and von Brauchitsch), while Rudolf Caracciola became European Champion for the third time. Auto Union, whose top driver Rosemeyer had been killed during the record-breaking attempts of January 1938, were only able to come through with a few successes towards the end of the season.

In 1939, the last season of racing before the Second World War, Mercedes-Benz was able to build further on the successes of the previous year with the W 154. The first race of the season was the Pau Grand Prix, which Hermann Lang won in a W 154 ahead of Manfred von Brauchitsch, so taking his revenge for the defeat of the previous year. In addition, Lang took the chequered flag at the Eifel race in May of the same year, with Caracciola in third place and von Brauchitsch in fourth.

Hermann Lang continued to build on this impressive series of victories. He won the Höhenstrassen-Rennen (High Road Race) in Vienna in a hillclimb version of the W 154 (with von Brauchitsch in 3rd place), a result replicated at the Belgian Grand Prix in Spa. Caracciola then won the German Grand Prix at the Nürburgring – for the fifth time. The Swiss Grand Prix was won by Lang ahead of Caracciola and von Brauchitsch. Lang also won the German Hillclimb Grand Prix on the Grossglockner pass, thereby securing the 1939 German Hillclimb title. He was clearly the season’s top driver, but with the outbreak of war the authorities responsible, the AIACR in Paris, were unable to award the title of European Champion.

The last start for the Silver Arrows in 1939 was in the second Belgrade City Race on 3 September. Manfred von Brauchitsch finished second in his W 154 behind Tazio Nuvolari for Auto Union. But by this time, the Second World War had already begun.

Years of construction:	1938 to 1939
Cylinders:	V12
Displacement:	2,962cc
Output:	up to 483 hp (355 kW)
Top speed:	approx. 300 km/h