in 1934, this Silver Arrow was the winner without paint.
The race organizers were working to reduce the vehicles’ power and with it their racing speed, as tires and brakes weren't evolving as fast as the top speed and aerodynamics, so they limited engine size at first... this car was a 205 cu in, and weighed 750 Kg, at 354 Hp then it was upgraded in steps that went:
M25A 3360cc 354HP,
M25AB 3710cc 398HP,
M25B 3990cc 430HP,
M25C 4300cc 462HP
ME25 4740cc 494HP
the 750-kg formula had been created to curb the ever-escalating speed of the powerful racing cars – built for example by Alfa Romeo, Bugatti and Maserati.
The very opposite was achieved since design engineers at once resorted to bigger displacements.
The actual output of the eight-cylinder engine at the beginning amounted to a massive 354 hp (260 kW). Several engine versions with boosted power output followed. The M 25 AB (3710 cc) variant generated 398 hp (293 kW), followed by the M 25 B (3980 cc and 430 hp/316 kW) and C (4300 cc and 462 hp/340 kW) variants, and eventually, in 1936, the ME 25 version (4740 cc) producing 494 hp (363 kW) – always at 5800 rpm.
With the W 25, the Mercedes-Benz engineers ended up removing the previously customary white paint to make weight, because the car was 1 kilogram too heavy.
Until the paint was sanded off. Paint was leaded back then... and heavy.
https://www.mercedes-benz.com/en/mercedes-benz/classic/history/mercedes-benz-silver-arrows/
https://www.supercars.net/blog/1934-mercedes-benz-w25/
Neubauer told how these white-painted W25s then proved overweight during scrutineering for the next race, the EifelRennen at the Nürburgring in June.
Another non-start was unacceptable; in Berlin, a former house painter was expecting a return on his government's investment. (Hitler who was bankrolling the Mercedes team for winning results to support his German superior race propaganda)
What to do? Neubauer had a brainwave: "Scrape off the paint!" Next morning, in bare metal, the new cars met the 750kg limit and works driver Manfred von Brauchitsch won the race. "And so silver replaced white as the German national racing colour - the Silver Arrows had been born."
http://www.telegraph.co.uk/motoring/motorsport/2749203/The-history-of-the-Silver-Arrows.html
Initial power ratings for the car was 314 bhp at 5,800 rpm. Using a new fuel mixture provided by Standard Oil that replaced the gasoline/benzol with methyl alcohol horsepower was bumped to 354 bhp. A new era of exotic racing fuels was evolving
http://www.grandprixhistory.org/merc25.htm
Adopting a national official racing color goes back about 117 years, to the Gordon Bennett races
In 1900 just four national colours were allocated: blue for France, yellow for Belgium, black for Germany, red for the United States.
How did the British get the color green?
There are two stories, equally plausible:
A) In 1901 the great capital-to-capital Paris-Berlin race saw wealthy British sportsman Charles Jarrott order a Panhard. The car was painted green... M. Clément gave me a reason for this. My number in the race was 13, because no one else would have it. But they had been struck with the happy idea of painting the car green (the French lucky colour) to nullify the unlucky number..."
B) Road and Track magazine reader Hayden R. Shepley's comment, concerning an article in the Cyril Posthumus in April 1969... The origin of the color British Racing Green is from 1903 when the British wouldn't allow the Gordon Bennett race to be held in Britain. Ireland was asked to hold the race on their roads after Parliament had a special act passed to allow this. This act allowed certain public roads to be closed, thereby making this the first ever closed circuit race in automobile history. As a compliment to the Irish, all the English cars were painted a dark green.
I haven't read yet how Germany went from Black to White, but they went from White to Silver right there with the 1934 W25.
The long years of national racing colours, with no overt advertising, crumbled in 1968 after motorsport's previous big-money backers - the international oil companies - slashed support. Non-motoring sponsors had to be found and the rule makers dropped opposition to on-car advertising. Colin Chapman immediately sold space on his Lotus cars to John Player for its Gold Leaf cigarette brand. Almost overnight, modern Grand Prix cars became mobile advertising hoardings.
http://justacarguy.blogspot.com/2011/07/trivia-why-red-is-italys-racing-color.html
http://justacarguy.blogspot.com/2006/11/british-racing-green.html
as for why there are now Grand Prix races, and no Gordon Bennett Cup races?
The Gordon Bennett was contested between teams of no more than three cars, representing each nation's motor industry. The French felt this to be enormously unfair, as their motor industry was by far the world's largest and most diverse, and yet they were restricted to the same number of race cars as little Belgium... or emergent America.
French discomfort led eventually to their replacing the Gordon Bennett Cup from 1906 with their own new race - the Grand Prix.