We found this article on the Motors UK Blog. Very interesting and good reading.
1876 Nikolaus August Otto invented and later patented a successful four stroke engine, the ’Otto Cycle’. In that same year, the first successful two stroke engine was invented by a Scottish engineer, Sir Duguld Clerk.
1886 Motor age moves forward

The first vehicles driven using internal combustion engines where developed around the same time by two engineers working in different parts of Germany, namely Gottlieb Daimler and Karl Benz. Simultaneously they developed highly successful and practically powered vehicles that worked similar to the motor vehicles we use today. This is when the age of modern motor vehicles began.
1889 The first motor company formed
Pretty neat pictures and the rest of the story here.

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