Welcome back to our media Q&A in the framework of the annual results conference and annual capital markets. I would like to welcome our CFO, our CEO Källenius, our CFO Harald Wilhelm, and CTO Markus Schäfer. I would like to hand back to the operator because we also have guests who take part digitally. Welcome to the Mercedes-Benz telephone conference. This conference will be recorded. The recording and our information about privacy can be found on the website of the company. After a brief round of introductions, you have time for Q&A. If you have any difficulties, please press zero and... Hashtag on your phone. Please remember that there are a few risks and uncertainties which are illustrated by way of example in the documents published. If the assumptions that look ahead into the future should turn out to be not correct, the actual events could deviate from whatever is said today. We do not intend to be held liable for forecasts, and we do not intend to update these because these are based merely on the circumstances prevailing on the day of publication. Well, good morning. You listen to the Q&A session of analysts and the presentations. Now you have the opportunity to ask questions yourselves. Before we get started, let me tell you that the operator will explain what you have to do if you ask your questions online. If you want to ask your questions here from the audience, please raise your hand and please push the button on the microphone that's in front of you. And once your question has been answered, please push the button again so that your question... so that others can get back and ask their questions. We will finish at about 12:15 P.M. The recording of the call will be put on our website after the call. If you don't agree to have your question recorded, please let us know by 1:00 P.M., and we will take this into account. Please ask slowly so that the interpreters can do a good job when you ask your questions. Thank you very much. Ladies and gentlemen, if you want to ask a question, please press nine and asterisk on your keypad. You will listen. Thank you for your entry. If you want to withdraw your request, please press nine and asterisk again, and you will hear an audible signal. Please do not press nine and asterisk several times consecutively. You will be called up by us. Please wait for a moment. We will now register and record your questions. Ms. Wissenbach, we will start here in the audience. Ilona Wissenbach, Reuters. No, I can ask in German. I'm still a bit confused about the group. Why is it supposed to go down so drastically, more than 15% or roughly more than 2 billion EUR? Can you please summarize the three most important factors? Because there are so many imponderables, so many uncertainties, I'm getting a bit lost here. One factor, of course, I understand is that you don't launch so many models this year, but what are the other factors regarding markets and demand? My second question, I'm missing a few figures about which we've read a lot in recent weeks. Now, the cost-saving program, will it be 5 million EUR, Mr. Wilkes? I couldn't find it on the slides, and maybe you mentioned it, but I didn't hear it. And then you said about costs that they will go down by 10%. What do you intend to do regarding headcount? Will you also reduce it by 10%, and this would be about 16,000 persons who would be affected around the world. Okay, so three questions. Harald? Yes, thank you. So today we explained at the division or business level for cars. What is our prospect, our perspective for the market, our forecast? We are very cautious, and we explained the results. So as far as passenger cars are concerned, we said 6%-8%, but with a lower volume. As regards vans, we said we'd also adopt a very cautious approach, looking at the markets, a lower volume combined with a lower ROS of 10%-12% compared to 14%-16%. Now, if you do your math, you will quickly realize that mechanically consolidated at group level, EBIT will go down drastically, significantly below prior level on the basis of this guidance. Regarding cost, I think we've presented many reference points and many targets regarding our ambitions and also costs. We presented absolute values and also changes in terms of percentages. Again and again, you will see figures, or we referred to figures in our reporting, EUR 5 billion, you mentioned that. Now, let me say EUR 5 billion compared to internal planning. Well, none of you is familiar with the internal planning unless you have it, so it doesn't make sense to talk too much about it. So we've communicated everything the way we did today compared to absolute actuals or changes when it comes to material and production cost. Talking about cost cuts, all types of costs are concerned, and I think we've made this point clear today, and this includes HR cost too, of course, our leading dimension. However, euros, and then it's broken down to all functions across the world, all countries. Of course, this will entail headcount reduction in certain countries and also in Germany, especially in the indirect area. I think I hinted at that today, but we do not want to quantify this. We are having constructive talks, and of course, the head of department is responsible for implementing the targets defined in the program and to initiate corresponding measures. And you can rest assured that whenever we do some restructuring regarding HR, we do that in a responsible manner as we did in recent years in the past. Mr. Zwick. Yes, thank you very much. I have two questions. One is more political in nature. We have federal elections on Sunday. You said that you want to shift production from Germany to Eastern Europe because these countries are less costly. What could a new federal government do in order to persuade you to invest more in Germany? So in concrete terms, what would they have to do to make you stay and invest more here? And the other question is about the ban on ICE cars in the European Union. I'm talking about 2035. I mean, this ban is put into question again. The lineup that you've presented could you actually go beyond 2035? Now you presented ICE cars until 2027, and they will surely last until 35, but what about after 35? Now, let me start by citing two interesting articles that were published last year, the so-called Letta report in the spring of last year and then later on behalf of the Commission, the Draghi report. Now, both reports are worthwhile reading. Why? Because they analyze excellently where we are as Europeans. So they do some kind of stock-taking of our competitiveness, and there is a specific chapter on the automotive industry in the Draghi report. Before Christmas, I had a chance to talk to that with Mr. Draghi personally and to hear from the horse's mouth, as it were, what he thinks about it. And I left this conversation thinking, why don't we do that? I mean, it says everything. But there are many, many different suggestions that are not easy to implement politically. However, in our brief and this year, I have the honor of being the spokesperson for ACEA. It's a rotating post regarding competitiveness. We as a ACEA only said this. Do read the Draghi report and do what it says. There's a lot of information in there. It goes far beyond classical industry up to capital market unions and many things that could generate growth, and growth is exactly what we need. Now, if I break this down to the Federal Republic of Germany, the biggest national economy in Europe, I mean, basically it's the same thing, and you can do a litmus test every law that's planned and proposed. You can ask, will it generate more growth and more competitiveness for the entrepreneurs, for the industry? And if the answer to that question is yes, there will be more economic growth. If the answer is no, there won't be economic growth, most probably, and capital always is looking for a risk-adjusted return. Capital doesn't know a party and not a country. Capital votes for return and other national economies, adjacent economies that try to improve their situation based on this equation. We have to start thinking about how to improve our location, Germany, as an investment location. How can we make it more attractive? We invested EUR 14-16 billion into R&D tools, plants, etc., and most of it in Germany. It's difficult to show even more commitment than we've shown so far. But the relative competitiveness of Europe is really up to be tested, and we would like to see some action. Your question about 2035, well, the automotive industry in Europe wants to talk about that. What have we achieved during the first part of the transformation, the first chapter of the transformation of the last five years ever since the Green Deal has been around? Now we only have 10 years to go to 35. What about the charging infrastructure? How far have we progressed? How ready are customers emotionally and mentally to change over? Do we believe that the complete remainder of the journey can be traveled up to a certain target in 2035? Now the doubts are growing, especially among suppliers. Now, if you listen attentively to what CLEPA says, that is the association of suppliers in Europe, and this is where most of the employment is, many thousands of companies are combined under this umbrella. Now they raise the alarms and say if it doesn't work out, the situation will become extremely serious. In such a situation, you really have to check how to align the growth targets, growth, prosperity, jobs, etc., and the automotive industry doesn't put this into question. We are the stakeholder, the stakeholder that by far, by a long shot, invests the most money into decarbonization, three-digit billions, so if there is one stakeholder that believes in decarbonization, it's the automotive industry, it's us. But if the conditions are not right, you have to think of other scenarios, and you have to be more flexible. And this is a discussion that we have to have, especially because the other two big economic regions do not have such a target, but they are way more flexible, especially the Chinese, but also the Americans. And we, as Mercedes in this case, we can respond to everything you have seen, our product portfolio and what we can do with it. So we have two questions from the telephone participants that dialed in telephonically. So this is from Handelsblatt. I have two questions. Now, in terms of the big picture, Mr. Källenius, Mr. Wilhelm, if you would add production capacities and at least with a view towards 2025, you talked about this decline in sales. On the one hand, aside, is this not worth anything anymore? What happened to your growth ambitions? Because you wanted to increase the number of units to 3 million, and now you are actually going down even further. So this is not the perspective that I thought you would show me. So I just wanted to pull that up. And then also in a previous message, you also pre-announced that you might look into increasing production capacities and other capacities in China. So does this relate to vehicle production and engine production or just one and not the other? Maybe you can talk a little bit more about that. Thank you. Okay, so just going from, well, starting with the first question, in terms of the outlook and the financial expectations for 2025 and beyond that we talked about today, I believe that we emphasize the fact that we do not, we only apply that cautious view to market developments. In particular, when it comes to China, does that mean that we don't want to fight for market share? No, of course not. We will do that, but we also need to have the products and cost competitiveness, and we will definitely attack, but it's just a matter of fact that we might have been below 2 million in 2024 because we also saw that as a sensible operating point. By applying a cautious perspective for 2025, we said a little bit lower than in 2024, but with the product fireworks in 2025 and 2026 and 2027, we'll generate a different type of dynamics. Then for 2025 and following, for 2027 and following, the numbers should be different. This is what we have been preparing, and this is also what we have fought for in the market. And in order for that to be able to be competitive, we need to be competitive in terms of cost as well. And that is why we went on at such great detail about what we're doing in the world. And of course, there's this underlying principle that we need to adapt capacities to market conditions and the fact that this has changed substantially as compared to a few years ago. And the fact that competition is a lot fiercer in terms of participants and the means that they use is something we also know, and we just have to be prepared for that and adjust capacities accordingly and ensure that you remain competitive on that basis and with the plans and the capacity expansions that we talked about today. We are confident that we can do that also with this reduction in fixed costs. We believe that we'll be able to do that, and we also achieved that in the past few years on the actuals, and this is what we're going to do in future as well. So Ms. Waldersee of Reuters dialed in telephonically as well. Can you hear me okay? Yes, we can hear you okay. Thank you. All right, I have two questions. One on the future of the German plants. You said you're not going to close down any plants, but you're going to move some capacity to Hungary. When do you think that that move will take place? In the medium term, at the end of the decade, etc.? And what are you going to do with the excess capacity in Germany? Linked up to that, my second question, some investors and also employee representatives lose trust in the strategy because they believe that they need two million units per year in order to utilize plants sufficiently. But the question is, why have you made the decision the way you have, and what is it based on? This is not about a shift from one car to another or one plant to another. It's about making sure that with the product campaign that we're looking at, the 20 plus models in three years, we need to have the production location set up right. And this goes back to what Harald Wilhelm said, in that we need to make sure that we will use the plant structure in Hungary even more, and that's going to lead to more competitive production costs. But we also have a perspective and target pictures for the German plants, and if we make any adaptations in Germany, we'll do this in a sensible, responsible manner, and we'll also do this according to centers of competence. Today, we're in Sindelfingen. This is the competence center for the upper range vehicles with the S-Class as a flagship. We also have a competence center for the vehicles in Bremen, and we also have a competence center for the entry vehicles in Rastatt. Nothing's going to change about that. And of course, you're going to take a closer look at what makes sense in the respective sites, and we apply a very thorough logic and analysis, and we need to take general competitiveness into account. As Harald said, we keep investing in new products because we want to grow profitably. It's our clear intention to grow, to keep growing, and to create this balance around 2 million units. We've shown that in the last two years that this is a good balance, and we'll have 200 vans that go on top, and if you then translate that into revenue, then we'll be one of the key players, it's not growth for the sake of growth, but profitable growth is what we're after, also with a new product that we are going to introduce. It wouldn't make any sense to say, well, maybe there is a volume segment just below the MP vehicles. You could do that, but the question is, would that really bring about a sensible margin? Because we are a premium luxury manufacturer. We don't have the same cost structure as a large volume manufacturer. You could go for volume, but you also don't have a saver going to a savings bank and accept much lower interest as with another bank. We should also not do that with the capital that our shareholders entrusted with us and just stick to what we can do best, entry, core, and top end. This is what we're going to stick to, and we're going to consistently implement this strategy. Okay, I have Mr. Demling of Der Spiegel here in the room. Y es, I have three questions. I think one for each of you, if I'm not mistaken. Now, first of all, you mentioned that you looked into the fact whether you're going to introduce a core model in the US. Does it have to do with the tariffs? Is it a mixture maybe? If these tariffs were to be introduced, what timeframe are we talking about, Mr. Källenius? And then secondly, the question to Mr. Wilhelm, your projection for 2025, does this include any spending for this pool of CO2 that you already said you would go and invest in or not yet? And if so, how high would that be? And then also, BYD introduced the God's Eye system a few years ago and wants to basically produce very cheap models, level two systems, that is. Do you believe that this is something that will have an impact in China or elsewhere on DRIVE PILOT system and other systems that you would like to sell and make money with? Or how do you think this is going to influence this market? On the first question, well, we've been present in the U.S. for more than 100 years now, and if you just look at that from an economic standpoint and just look at the $29 billion of GDP, this is by far the largest economic potential that this represents. The fact that after decades of successful business dealings, we want to take part even more actively is something that doesn't come as a surprise, so this is nothing that is short term. We are saying the U.S., from a strategic standpoint, is a market in which we can grow. Now, the question is, which one is the next product? It's the product that you believe you can also establish the greatest market footprint with. This is what drives our considerations. For the tariffs, it's very difficult to know what's going to happen. If something were to happen and you wanted to respond to that, you also need to make sure that relocating a plant is something that takes two, three, maybe four years, so it's nothing that allows you to respond in the short term, but we believe in the U.S. We believe in growth in the U.S., and we want to grow in the U.S., and this is what has been guiding us in our strategy. On that second question, and just to say that upfront, it is and has been the target with the regulatory CO2 targets to achieve those, and to achieve that also by ramping up XEV for 2025. We believe that this will happen because of the appeal of the plug-in portfolio, which is the strongest portfolio in the market, and also the way how these vehicles, CLA, MMA, but then also the volume segment, the C and GLC segments, these also will contribute to us getting closer to the target zone when it comes to the regulatory requirements. Now, on your specific question, the burden from an arrangement pooling, is that included in the 2025 guidance? Of course, this is included. I also told you that, and this was also an investor question, for passenger cars, this would be a very low three-digit number, and you will know what that means. Whereas with vans, due to the CO2 impact coming from the size of the vehicle, this impact will be higher and will be a little bit less than double the volume for CO2 and for passenger cars and for this aspect of achieving CO2 targets. Now, in terms of efficiency systems, we're actually not caught by surprise by the developments in China because we've been preparing for that, and the system that we're going to show with the new CLA is going to address that very effect, including this expectation and this claim to get to the top with level two plus. So you enter a target address, and the vehicle will find its way in dense traffic. Also, this will be the target picture, and we believe that we'll also be at the top of the competition in China with that. And in addition to that, we have this very intelligent artificial intelligence models, new models that are not rule-based, but are large models, end-to-end models. And with that, we can also use the hardware very efficiently that's installed in the vehicle and get to a very high safety level. And also, in comparison to the Chinese competitors, which we take very seriously, also when it comes to costs and the performance of the system, we are on a very competitive level. You always need to look at the details to see what the system, the competition offers, really can provide, and we're doing that, and we have been showing what that can do, and we think we'll be in the lead. In terms of pricing that into the products, we'll do that once we enter that market, and we will surely also be competitive and also include that in our pricing from that standpoint. Don't have a lot of time, but many requests for the floor, so please limit yourselves to asking one question, Mr. Wagner. A very brief follow-up question on the volume. You presented the CLA, and the CLA family is supposed to replace the A-Class and B-Class. Do you believe that the unit numbers of the CLA family with which you want to replace the A-Class and B-Class? Well, a question for Mr. Schäfer. Well, you had DRIVE PILOT and presented it with speeds up to 95 km/h. Can you tell me when the system will be launched in which car? As regards the MMA architecture, we have these four models that we selected, and we believe they have the biggest potential globally and the volume models below the MMA architecture models, well, this is not the CLA, this is the first one. The volume models are the SUVs, definitely, because they are highly coveted. GLA, GLB, all the models that will be launched over the course of the next two and a half years, and in this volume, well, about 2 million units, Harald said, we are talking about 500,000 units plus minus, and this is the region that would be adequate here, DRIVE PILOT is available with the S-Class and the EQS, and it'll be available and can be ordered these days also via software. It can be downloaded to existing models that are authorized up to 60 km/h, so you can do a software update and have it on board. Patricia Nilsson, Financial Times, you have a question. Patricia, can you hear us? Okay, it doesn't work, so let's continue here in this room. William Wilkes, Bloomberg. I just had a question on the China stimulus measures. Are you in contact with Chinese authorities about the stimulus plans, and do you expect that to have much of an effect on demand for your vehicles this year? You're supposed to answer in English or German? German. German. Okay, we maintain very good contact with the policymakers in China. There are ongoing talks, so we are always in close contact with them. We know what's going on, and over the last six months, we can say that the policymakers in China have initiated various measures in order to stimulate the economy. Whether this has arrived psychologically in the customer's mind, not yet, but the blocks, I mean, they are now putting blocks on top of each other, and this is a positive movement. In which way this will impact the market in 2025 remains to be seen. As Harald said, we opted to present a very cautious outlook on 2025, but you can see various indications that would suggest that growth is very high on the agenda and that they start doing something. Let's wait and see what kind of impact this will have. Stephen Wilmot from the Wall Street Journal, also here in this room. Yes, good morning. The optional regulational product, you gave an answer to my colleague, but what does this option depend on? I couldn't quite understand. Your question relates to the China footprint? I'll ask in English, okay? You talked in your presentation about the optional localization of additional product in the core segment, which you gave an answer to, my colleague. I'm just wondering, what does the option depend on? Well, you do study, you check the economic feasibility, you check the market potential, and then you take a decision. We haven't taken it formally yet. This is why he said optional. Okay, let's try our luck again with Patricia Nilsson. Hi, thank you for that. I'm not sure what went wrong. My question was, I know that you're launching more ICE than EV vehicles over the next two years, and I was wondering, can you give a bit more detail as to what this means in terms of your R&D spend? Are you ramping up spend on combustion engine models again? And a second question, this morning you gave investors a steer on how margins would be impacted by U.S. import tariffs raising to 10%. Trump yesterday said he's considering tariffs of 25%. Are you underestimating the risks in the U.S. market? Thank you. Patricia. Patricia. I'll answer in German. Wir haben eigentlich ein recht ausgewogenes Bild gezeigt. Actually, we presented a fairly balanced picture. Now, I didn't count plus minus three months up or down, but I think our picture was fairly balanced with a phenomenal, fantastic EV push. MB.EA, AMG.EA, MB.OS, VAN.EA wasn't in the focus today, maybe, but we mentioned it several times. VAN.EA. So whatever is going on on the EV side is really something that writes history in our books. But the market is very heterogeneous. It's not a straight line that leads from A to B when we talk about zero emissions. So we make sure that our ICE portfolio, our high-tech electrified ICE portfolio, including class-leading plug-in hybrids, will be at the same technical level. So whenever you come to a Mercedes dealer, I mean, this is dreamlike for the customer. Customers can choose from whatever, but it has to be coherent. So technologically, it has to be state-of-the-art. And this is the reason why we have a number of updated ICE vehicles that we want to offer tariffs. Harald mentioned 10% to have some kind of reference value. What will actually happen? I don't think it would be really responsible to speculate about the results of potential negotiations. Mentally, we are preparing for all sorts of scenarios. We wanted to convey some impression of the order of magnitude to our investors. This is why we choose the 10%. Robin Wille, DPA, the last question in this room. Yes, thank you very much. Also, a follow-up question on headcount reduction, especially in Germany. Mr. Wilhelm, you said you didn't want to quantify this any further, but I'd like to try again because many in this country are interested in that. Could you actually mention a ballpark figure? Are we talking 100 headcount, a few thousand, maybe even 10,000? And then I'm also interested in your recruitment policy. On the one hand, you want to reduce employment figures here, but you want to create more jobs. Well, actually, you're writing on a hard rock with a hard knot. Let me hand over to Ola. Well, I think you mentioned a very important point with the second part of your question, and this is also part of my answer. If you take a look at your organization, checking what you need, you don't just apply an all-or-nothing approach, but you want to define your target. So it doesn't really make sense to quote a figure. Yes, HR cost is part of the total cost, but Harald also mentioned material cost, production cost, fixed cost, variable cost, and HR cost will be part of that, but we will not sort of cut everything right, left, and center. We will have clearly defined target pictures, and we will proceed prudently. Let me repeat, whenever we do something like this, we do it in a responsible manner, and this is what we'll do in this regard as well. Okay, so this brings us to the end of our media representatives' Q&A. Thank you very much. Everyone, if you have further questions, we still have time in the afternoon. Do not hesitate to approach us. Right now, I would like to wish you a very nice day, and we will now have lunch, which is also very important in addition to, well, actually next to the accreditation desk, which is where you came inside the building, you will find lunch being served in a small adjacent room. At 1:05 P.M., we will begin with a product experience, and my colleagues will pick you up and lead you to the various rooms. Okay, so enjoy your lunch break and have a nice afternoon.