In 1937 the organizers of the Avus Race decided to drop the requirement of compliance with the 750 kg formula in force at the time, but to allow a free formula without any weight limit. Mercedes-Benz used this opportunity to fit the DAB V 12, 5.6 litre engine that was originally designed for speed record attempts – with over 730 hp, but too heavy for the 750 kg formula – into a W 25 chassis.
In addition to the V 12 engine, an aerodynamic body similar to that used for record cars was added to help cope with the high-speed Avus track in Berlin, which in 1937, for the first time had a steep bend. Manfred von Brauchitsch was nominated to drive the Avus W 25, and he finished the second qualifying round in first place. He had to drop out of the race, however, due to a gear lever defect. On the straights he reached speeds of up to 380 kmh.