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In testing a replica of the Lenoir engine in 1861 Otto became aware of the
effects of compression on the fuel charge. In 1862 Otto attempted to
produce an engine to improve on the poor efficiency and reliability of the
Lenoir engine. He tried to create an engine which would compress the fuel
mixture prior to ignition, but failed, as that engine would run no more than
a few minutes prior to its destruction. Many engineers were also trying to
solve the problem with no success.
In 1864 Otto and Eugen Langen founded the first internal combustion
engine production company NA Otto and Cie (NA Otto and Company). Otto
and Cie succeeded in creating a successful atmospheric engine that same
year.
The factory ran out of space and was moved to the town of Deutz,
Germany in 1869 where the company was renamed to Gasmotoren-Fabrik
Deutz (The Gas Engine Manufacturing Company Deutz).
Gottlieb Daimler was technical director and Wilhelm Maybach was the
head of engine design. Daimler was a gunsmith who had also worked on
the Lenoir engine previously.
The Lenoir engine was an engine that burned fuel without first trying to
compress the fuel/mixture. The Otto/Langen atmospheric engine ran at
12% efficiency and produced .5 hp (0.37 kW; 0.51 PS) at 80 RPM. In
competition at the 1867 World's Fair in Paris, it easily bested the efficiency
of the Lenoir engine and won the Gold Medal, thus paving the way for
production and sales which funded additional research.
and Daimler joined the company in August, taking Maybach with him as
chief designer.[6] While Daimler managed to improve production, the
weakness in the Otto's vertical piston design, coupled to Daimler's
stubborn insistence on atmospheric engines, led the company to an
impasse.
For all its commercial success, with the company producing 634 engines a
year by 1875, the Otto and Langen engine had hit a technical dead end: it
produced only 3 hp (2.2 kW; 3.0 PS), yet required 1013 ft (3.04.0 m)
headroom to operate.[7] In 1882, after producing 2,649 engines, the
atmospheric engine production was discontinued. This was also the year
that Gottlieb Daimler and Wilhelm Maybach left the company.