In 1938 a new racing formula was introduced, which limited the displacement of racing cars with a compressor to 3 litres. This changed rule was determining motor racing sport of the succeeding years.

Mercedes-Benz developed an entirely new V12-engine with 485 hp for the W 154. A 5-speed transmission was added and was directly mounted on the de Dion rear axle. One tank was in the rear, a second in the cockpit, above the driver’s legs.

In this vehicle the drivers Caracciola, Lang, von Brauchitsch and Seaman of the Daimler-Benz team gained one victory after the other. In 1938 Caracciola became European Champion. At the French Grand Prix on the 3rd of July, 1938, Mercedes-Benz gained a triple victory: von Brauchitsch came in first, Caracciola second and Hermann Lang third. In 1939 Hermann Lang became European Champion with the further developed W 154.