As the right hand of chief design engineer Hans Nibel, from then on Nallinger had the opportunity to exert decisive influence on future vehicle and engine concepts. Initial tests with a full swingaxle suspension were conducted, which first saw use in 1931 in the “small Mercedes” 170. At the same time, an increasing amount of time was devoted to the cultivation of the economical high-speed diesel engine, realised in 1936 in the 260 D model.
In May 1935, Fritz Nallinger took over the general management of heavyduty engine construction as technical director. In April 1940, he was appointed deputy member of the Board of Management, and in 1941 full member. From 1945 to early 1948, his mandate was suspended because of a special assignment from the French government. In May 1948, he resumed his work as member of the Board of Management and Technical Director of Daimler-Benz AG, now assuming overall responsibility for the design, testing and development of all vehicle lines of the company. Under the direction of Fritz Nallinger, his closest technical assistants, Hans Scherenberg and Rudolf Uhlenhaut, developed a new Formula 1 racing car. The W 196 was a huge success, and in 1954 and 1955 Juan Manuel Fangio captured the Formula 1 world championship in this Silver Arrow. Fritz Nallinger retired at the end of 1965, with more than 300 patents to his name.