Albert Friedrich (former chief engineer of Daimler-Benz's aircraft engine research division) started in December 1945, developing a highly specialized vehicle for agriculture. His concept was for a four-wheel drive, self locking differentials, high ground clearance (by rigid portal axles), with power take offs at the front and rear, a small loading platform, a driver's cab for two people, extremely low speed for working in the fields, and with highway capability for up to 50 km/h (30 mph). The project started in a factory at Schwäbisch Gmünd, in southern Germany, in the Gold und Silberfabrik Erhand & Söhne. The company had never before been involved in making vehicles or tractors.
Seven months later the first prototype, equipped with a 4-cylinder, 1.7 liter (103 cu. in.) gasoline engine was complete. Still lacking in 1946 was a good quality diesel engine and the name for this new vehicle, which was neither a truck or a tractor. The name problem was soon solved by Hans Zabel, an engineer with the firm. He created an acronym from the name: UNIversal-MOtorGerät (universal-power-unit) or UNIMOG.
The first UNIMOG saw intensive testing in 1947 and the results confirmed the concept. In 1948 a diesel engine became available, the 25 hp Daimler-Benz OM 636, which was also used in their 170D car. That same year the UNIMOG was shown at Frankfurt/Main for the first time. As a result of the show there was great enthusiasm which resulted in production plans. The UNIMOG team now searched for a new plant. In the autumn of 1948 they moved to the Werkzeugmaschinenfabrik Boehringer factory which became the new manufacturing plant for UNIMOG. In the following two years about 600 UNIMOGs (U 25) were produced. In 1951 Daimler-Benz (DB) started showing interest and the UNIMOG plant moved again to Gaggenau, where there is still the UNIMOG production line today. In May 1953 UNIMOG received the famous Mercedes star.