Q4 2025 Mercedes-Benz Group AG Earnings Call

Speaker #1: Welcome to the Q&A session. At our customers' request, this conference will be recorded. The replay of the conference will also be available as an on-demand video webcast in the Investor Relations section of the Mercedes-Benz website.

Operator: Welcome to the Q&A session. At a customer's request, this conference will be recorded. The replay of the conference will also be available as an on-demand video webcast in the investor relations section of the Mercedes-Benz website. If you have difficulties during the conference, please press zero and the pound key on your telephone keypad for operator assistance. I would like to remind you that this conference is governed by the safe harbor wording that you will find in our published results documents. Please note that our presentations contain forward-looking statements that reflect management's current views with respect to future events. Such statements are subject to many risks and uncertainties. If the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. ... Forward-looking statements speak only to the date on which they are made.

Speaker #1: If you have difficulties during the conference, please press 0 and the pound key, on your telephone keypad for operator assistance. I would like to remind you that this conference is governed by the Safe Harbour wording that you will find in our published results documents.

Speaker #1: Please note that our presentations contain forward-looking statements that reflect management's current views with respect to future events. Such statements are subject to many risks and uncertainties.

Speaker #1: If the assumptions underlying any of these statements prove correct, then actual results may be materially different from those expressed or implied by such statements.

Speaker #1: Forward-looking statements speak only to the date on which they are made. May I now hand over to Christina Schenk, Head of Investor Relations, Digital and Communications at Mercedes-Benz, and Willem Spelten, Head of Corporate Communications at Mercedes-Benz.

Operator: May I now hand over to Christina Schenck, Head of Investor Relations, Digital & Communications at Mercedes-Benz, and Willem Spelten, Head of Corporate Communications at Mercedes-Benz. Thank you very much.

Speaker #1: Thank you very much.

Speaker #2: Welcome back here in the room, and welcome back online for our more interactive part now, the Q&A session. I have with me Harald, Ola, Oliver, and Matthias, for our Q&A.

Christina Schenck: Welcome back here in the room, and welcome back online for our more interactive part now, the Q&A session. I have with me Harald, Ola, Oliver, and Mathias for our Q&A, and we have roughly 1 hour time, which we will dedicate the first 30 minutes to the analyst and the investor questions, and the last 30 minutes to journalists.

Speaker #2: And we have roughly one hour of time, which we will dedicate: the first 30 minutes to the analyst and investor questions, and the last 30 minutes to journalists.

Speaker #3: And once we've wrapped up the questions from the analysts, we will change to the media Q&A. So, we start with analysts, and then go to the media.

Willem Spelten: Once we've wrapped up the questions from the analysts, we will change to the media Q&A. So we start with analysts, go then to the media. The media part will be held in German. We're starting in English, second part will be in German. If you're bilingual, we kindly ask you to pose your question in whatever language you prefer, English or German, and we will answer in the same language you chose. Simultaneous interpretation is available for all participants. German is on channel one, English is on channel two, and Chinese is on channel three.

Speaker #3: The media part will be held in German. We're starting in English, the second part will be in German. If you're bilingual, we can't ask you to post your question in whatever language you prefer.

Speaker #3: English or German, and we will answer in the same language you choose. Simultaneous interpretation is available for all participants: German is on channel one, English is on channel two, and Chinese is on channel three.

Speaker #2: So let's now begin with the analyst and the investor questions. As usual, please bear with me for some instructions. I see your hands already.

Christina Schenck: So let's now begin with the analyst and the investor questions. As usual, please bear with me for some instructions. I see your hands already. For the participants online, the operator will explain the procedure for registering your questions on the phone line again shortly. For participants here in the room, as usual, please raise your hand, and we will call you up. To be audible to everyone, please press the button on the microphone in front of you. Please also tell us your name and the name of your organization. When your question is answered, please make sure to switch off your microphones again. Our conference call will end around 11:45AM. Please take your time with your questions and ask them slowly and clearly so that the translators can do their job well. Thank you, and now I hand back to the operator.

Speaker #2: For the participants online, the operator will explain the procedure for registering your questions on the phone line again shortly. For participants here in the room, as usual, please raise your hand and we will call you up.

Speaker #2: To be audible to everyone, please press the button on the microphone in front of you. Please also tell us your name and the name of your organization.

Speaker #2: When your question is answered, please make sure to switch off your microphones again. Our conference call will end around 11:45. Please take your time.

Speaker #2: With your questions and ask them slowly and clearly so that the translators can do their job well. Thank you, and now I hand back to the operator.

Speaker #4: If you want to ask a question, please press 9 and the star key. On your telephone keypad and you will hear the following message.

Operator: If you want to ask a question, please press nine and the star key on your telephone keypad, and you will hear the following message: "Thank you for your participation. Your request to speak is registered." When it's your turn to raise a question, you will hear the message, "You are now in talk mode." To withdraw a question, please dial three, star, after which you'll hear the message, "Your request to speak has been removed." You will be called upon by us. One moment, please, we are now registering your questions. I will now hand back to Christina Schenck.

Speaker #4: Thank you for your participation. Your request to speak is registered. When it's your turn to raise a question, you will hear the message, 'You are now,' in talk mode.

Speaker #4: To withdraw a question, please dial three star after which you'll hear the message, "Your request to speak has been removed." You will be called upon by us.

Speaker #4: One moment, please. We are now registering your questions. I will now hand back to Christina Schenk.

Speaker #2: So let's start with the questions in the room. I go for Horst Schneider. Horst, over to you.

Christina Schenck: So let's start with the questions in the room. I go for Horst Schneider. Horst, over to you.

Speaker #5: Yeah.

[Analyst] (Société Générale): Yeah, push the button, yeah?

Speaker #2: Push the button.

Christina Schenck: Push the button.

Speaker #5: Okay. Yeah. No, you can hear me. Thank you. Yeah, thanks for taking my questions. When I—I mean, first of all, it's great detail that you provided in these midterm targets and how they can be achieved.

[Analyst] (Société Générale): Yeah. Now you can hear me. Thank you. Yeah, thanks for taking my questions. I mean, first of all, it's great detail that you provided in these midterm targets and how they can be achieved. I got it that you target now 7% revenue growth, and you target, we said, also positive price mix. Positive price mix, especially mix, does not mean that also this positive mix arrives at the bottom line. So maybe can you outline the details when you expect this price mix line to improve, which is still on price, -0.5% in 2026. So you assume that to continue this level of negative price or this pricing on earnings then also flips positive or neutral. Some details on that would be appreciated.

Speaker #5: I got it that you target now 7% revenue growth, and you target—we said also—positive price mix. Positive price mix, especially mix, does not mean that also this positive mix arrives at the bottom line.

Speaker #5: So, maybe can you outline the details? When do you expect this price/mix line to improve? Which is still on price minus half a percent in 2026.

Speaker #5: So you assume that to continue this level of negative price or this price on earnings line also flips positive or neutral. Some details on that would be appreciated.

[Analyst] (Société Générale): The second question that I have is on China, because I looked recently at the sales figures of the CLA, which is very attractively priced in China. I think it's a great car, but I was disappointed how low the unit sales are. You target also for the upcoming EVs and unit sales growth in China. My impression on the back of that, it's not the product, it's basically that the Chinese customer has got prejudices against foreign EVs. So my impression is that the price needs to be lower than the Chinese car before the Chinese buy them. So therefore, what is your confidence that you take, that you can really succeed with EVs in China? Thank you.

Speaker #5: The second question that I have is on China. Because I looked recently at the sales figures of the CLA, which is very attractively priced in China.

Speaker #5: I think it's a great car. But I was disappointed how low the unit sales are. You target also for the upcoming EVs and unit sales growth in China.

Speaker #5: My impression on the back of that, it's not the product. It's basically that the Chinese customer has got prejudices against foreign EVs. So my impression is that the price needs to be lower than the Chinese car before the Chinese buy them.

Speaker #5: So therefore, what is your confidence that you can really succeed with the EVs in China? Thank you.

Speaker #3: Yeah, maybe I’ll kick it off with the first question, Horst. In terms of the margin profile, I mean, I would suggest—let’s depart from the outlook, the guidance, the 2026 or the 3 to 5.

Harald Wilhelm: Yeah, maybe I kick it off with the first question, Horst, in terms of the margin profile. I mean, I would suggest, I mean, let's depart from the outlook, the guidance to 2026, so the 3 to 5. And, for the sake of the argument, if you want to take them in the midpoints, there's a departure point from there. When I said before, it's -1 on FX and hedging, on tariffs, it's a 1.5 plus on volume, price, mix, BEV, and it is a 4 on the efficiency. So basically, obviously, a 1.5, going from around 1.8 million to 2-ish, with a stronger top end, sounds rather like a lower number.

Speaker #3: I mean, for the sake of the argument, if you want to take, I mean, the midpoints, there’s a departure point from there. When I said before, it’s minus one on FX and hedging on tariffs.

Speaker #3: It's one and a half plus on volume, price, mix, BEV, and it is a four on efficiency. So basically, obviously, one and a half going from around 1.8 million to two-ish with a stronger top end sounds rather like a lower number.

Speaker #3: But clearly, I mean, you can see in that plan—therefore, I mean, we are not overambitious when it comes to the margin from the growth, but more ambitious when it comes to the margin from the cost.

Harald Wilhelm: But clearly, I mean, you can see in that plan, therefore, I mean, we are not overambitious when it comes to the margin from the growth, but more ambitious when it comes to the margin from the cost. I think that's number one, what you can read in there. Number two, at the beginning of the ramp-up of the EVs, obviously, you still have, I mean, an EV margin, which is lower than ICE, and therefore, I mean, an EV dilution sitting in there. So that is, I mean, a net number of all of the levers, volume favorable, pricing, mix, and EV.

Speaker #3: I think that's number one—what you can read in there. Number two, at the beginning of the ramp-up of the EVs, obviously, you still have, I mean, an EV margin which is lower than ICE, and therefore, I mean, an EV dilution sitting in there.

Speaker #3: So that is, I mean, a net number of all of the levers—volume, favorable pricing, mix, and EV. How should you think about the profiling, maybe, of that without giving each and every detail now, in terms of fiscally or even quarter in 2027?

Harald Wilhelm: How should you think about the profiling maybe of that, without giving each and every detail now in terms of fiscally or even quarter in 2027, but clearly, when you heard it, 2026?

Speaker #3: But clearly, I mean, you heard it—2026 is a ramp-up year in H2. So I think that suggests that in 2027, we should see some meaningful contribution from the top line.

Ola Källenius: ... is a ramp up year in H2. So I think that suggests that in 2027, we should see some meaningful contribution from the top line, so from that volume and mix in 2027 already. I hope that helps.

Speaker #3: So, from that volume and mix in 2027 already. I hope that helps.

Speaker #2: Then coming back to CLA, first of all, I agree with your assessment. It's a great product. And that's why we also value our customers' feedback, these activation rates, user traits on the technology given.

Mathias Geisen: Then coming back to CLA, first of all, I agree to your assessment. It's a great product, and that's why we also our customers feedback these activation rates, usage rates on the technology given. If you look closely at that segment, you see the CLA is a touch more niche in China than it is here, because cars and everything have gotten so much bigger in China, so we deliberately position it a touch more niche. Secondly, you have seen the vast pricing pressure, especially in Q4 on BEVs. In light of the incentives and the fade out of incentives, there was extreme measures in the market. We did not participate in those measures because we believe that the substance of the product will require a certain amount of time by customers to be fully understood and fully appreciated.

Speaker #2: If you look closely at that segment, you see the CLA is a touch more niche in China than it is here, because cars and everything have gotten so much bigger in China.

Speaker #2: So we deliberately position it a touch more niche. Secondly, you have seen the vast pricing pressure, especially in Q4 on BEVs in light of the incentives and the fade out of incentives.

Speaker #2: There was extreme measures in the market. We did not participate in those measures. Because we believe that the substance of the product will require a certain amount of time by customers to be fully understood and fully appreciated.

Speaker #2: If we now deliberately, very fast, go into this more aggressive positioning, I believe the attractive positioning is the right one. The overly aggressive entails further risks.

Mathias Geisen: If we now deliberately, very fast, go into this, more aggressive positioning, I believe the attractive positioning is the right one. The overly aggressive entails further risks. You've also seen, apart from the list price, if you look at the financial offerings, which many of the peer group offer, you see quite a deterioration in the net pricing. Year-over-year, some of these subsidies were dialed back, and I believe this will, in the foreseeable future, also help that there's going to be a slight rebound in pricing, and then the relative attractiveness of the CLA will increase.

Speaker #2: And you have also seen, apart from the list price, if you look at the financial offerings—which many of the peer group offer—you see quite a deterioration in the net pricing.

Speaker #2: Year over, some of the subsidies were dialed back. And I believe this will in the foreseeable future also help that there's going to be a slight rebound in pricing.

Speaker #2: And then the relative attractiveness of the CLA will increase.

Speaker #1: And then the plan for China is to stabilize profitability, or the ink, or increase profitability again.

[Analyst] (Société Générale): And then the plan for China is stabilize profitability or increase profitability again?

Speaker #3: Yes. And you will see with the next coming launches, especially the electric GLC, it is coming at a significantly larger vehicle, a bit more sweet spot, a bit less of this niche.

Mathias Geisen: Yes, and, you will see with the next coming launches, especially the electric GLC, it is coming at a, as a significantly larger vehicle, a bit more sweet spot, a bit less of this niche. Like, these CLA sedans is something where the whole market has shifted a bit.

Speaker #3: Like, these CLA sedans are something where the whole market has shifted a bit. So, we will always have it. But for us, the CLA is the anchor car for this tech stack to show its capability.

[Analyst] (Société Générale): Mm-hmm.

Mathias Geisen: So, we will always have it, but, for us, the CLA is the anchor car for this tech stack to show its capability. That's why we opted for a fixed pricing approach. And also, together with Momenta, we can offer roughly 10 cities right now, and we constantly roll it out, so the next cars coming will enjoy the fully deployed tech stack.

Speaker #3: That's why we opted for a fixed pricing approach. And also, together with momenta, we can offer roughly 10 cities right now. And we constantly roll it out.

Speaker #3: So the next cars coming will enjoy the fully deployed tech stack.

Speaker #1: Okay.

[Analyst] (Société Générale): Okay.

Speaker #2: On that journey, just to add to that, I agree with everything Ollie said. Look at the profile of our portfolio and also the average transaction price of our portfolio you mentioned.

Ola Källenius: On that journey, just to add to that, I agree with everything Oli said. Look at the profile of our portfolio and also the average transaction price of our portfolio. You mentioned it, where we sit above the relevant peer group. The most important action for us on NEV starts with the electric GLC. And needless to say, then E-Class next year and so on, are going to be very important.

Speaker #2: It will sit above the relevant peer group. The most important action for us on any EV starts with the electric GLC. And, needless to say, the E-Class next year—and so on—are going to be very important.

[Analyst] (Société Générale): Mm-hmm. Okay, thank you.

Speaker #1: Okay. Thank you.

Speaker #4: Thanks very much. Raise of hands. Tim over here.

Christina Schenck: Thanks very much. Raise of hands. Tim, over here.

Speaker #3: Yeah, thank you. Oliver, if I can maybe follow up on that in China, what's the mid to long term here? Should we expect you guys to have the same market share with BEV as you used to have on the ICE side?

Javier Martinez de Olcoz Cerdan: Yeah, thank you. Oliver, if I can maybe follow up on that in China, what's the mid- to long-term here? Should we expect you guys to have the same market share with BEV as you used to have on the ICE side, or will we have to get used to simply a smaller market with perhaps, to Horst's question, a stabilized profitability?

Speaker #3: Or will we have to get used to simply a smaller market with perhaps two horse question a stabilized profitability?

Speaker #2: I believe some segments in the Chinese market have shifted and are going to remain shifted. If you jump back to the pre-COVID era, 2019, the whole entry segment looked completely different compared to what it looks like today.

Mathias Geisen: I believe some segments in the Chinese market have shifted, and going to remain shifted. If you jump into the pre-COVID era, the 2019, then the whole entry segment looked completely different to what it looks today. If you just scale back in time and look, when did we deploy a long-wheelbase A-Class in 2019, what kind of vehicles are now in those segments? Secondly, in China, half of the market, half of the car market is now NEV. If you look at and dissect the market by price segments, especially below 300,000 RMB, below 200,000 RMB, that share even increases.

Speaker #2: If you just scale back in time and look when did we deploy a long wheelbase A-class in 2019? What kind of vehicles are now in those segments?

Speaker #2: Secondly, in China, the half of the market, half of the car market is now NEV. If you look at and dissect the market by price segments, especially below 300,000 RMB, below 200,000 RMB, that share even increases.

Speaker #2: So, I would say in that segment, we will offer a few cars, but no longer this full lineup as we have seen in 2019, or if you scale back further.

Mathias Geisen: So, I, I would say in that segment, we will offer a few cars, but no longer this full lineup as we have seen 2019, or if you scale back further. So, I do foresee, like deployed, and I explained the growth perspective, but it is to a lesser extent on the entry vehicles. But as of today, we cannot offer in mid-size SUVs, an electric alternative, right? So we are, we are happily enjoying great sales for our combustion GLC, it, it leads the pack. However, for the 50% seeking NEVs, it will be by mid of this year that we come with a long wheelbase, GLC.

Speaker #2: So I do foresee, like deployed and I explained, the gross perspective, but it is to a lesser extent on the entry vehicles. But as of today, we cannot offer, in mid-size SUVs, an electric alternative, right?

Speaker #2: So, we have been happily enjoying great sales for our combustion GLC. It leads the pack. However, for the 50% seeking NEVs, it will be by mid of this year that we come with a long wheelbase GLC.

Speaker #3: Okay. And don't forget that Ollie mentioned in his presentation a segment where we have enjoyed very nice business for many years has been the CBU imports of the GLE, one of our core vehicles in our portfolio worldwide.

Javier Martinez de Olcoz Cerdan: Okay.

Ola Källenius: And don't forget that Oli mentioned in his presentation, a segment where we have enjoyed a very nice business for many years, has been the CBU imports of the GLE, one of our core vehicles in our portfolio worldwide. That turns local this year, with a specific China version of that vehicle. So those segments become even more important. And in light of the tariff situation that Harald described, well, there was a slight shift in tariffs between the United States and China in 2025, which is not supporting export business in the same way that it did before. So it's crucially important to now localize such a core vehicle in our portfolio, and we think that will build momentum in that segment.

Speaker #3: That turns local this year. With a specific China version of that vehicle. So those segments become even more important. And in light of the tariff situation that Harald described, well, there was a slight shift in tariffs between the United States and China in 2025, which is not supporting export business in the same way that it did before.

Speaker #3: So it's crucially important to now localize such a core vehicle in our portfolio, and we think that will build momentum in that segment.

Speaker #2: And two more follow-up questions, please, to what was said. Maybe with you, Ola or Harald, because you also very much stand for this. I don't think I've heard the word 'growth' as often from you guys as today over the last four years.

Javier Martinez de Olcoz Cerdan: Two, 2 more follow-up questions, please, to what was said. Maybe with you, Oli or Harald, because you also very much stand for this. I don't think I've heard the word growth as often from you guys as today over the last 4 years, ever since Monaco. Certainly scared a few people, judging from my inbox on the investor side... Is value over volume over with this announcement? Do we now say 2 million units is what we need to achieve, we need the fixed cost coverage, or do you still very much prioritize margins? And if we then think about margins, Harald, to the 4 percentage points, sounds very ambitious with all the front loading you do on ADAS, as we discussed about yesterday, Ola, the cost going up on DRAM, all the other inflation.

Speaker #2: Ever since Monaco. Certainly scared a few people, judging from my inbox on the investor side. Is value over volume over with this announcement? Do you now say 2 million units is what we need to achieve?

Speaker #2: We need the fixed cost coverage. Or do you still very much prioritize margins? And if we then think about margins, Harald, to the 4 percentage points—sounds very ambitious with all the front-loading you do on ADAS, as we discussed yesterday, Ola. The cost going up on DRAM or the other inflation—what makes you confident that we don't stand here next year?

Javier Martinez de Olcoz Cerdan: What makes you confident that we don't stand here next year and you're telling me: Yeah, we achieved 4%, but actually the costs went up, so the net number is more like 2% or 3%. How should we think about that?

Speaker #2: And you're telling me, yeah, we achieved 4%, but actually the costs went up. So the net number is more like 2% or 3%. How should we think about that?

Speaker #3: So on the first one, if we go all the way back to that original presentation, pillar two is called profitable growth. It's not called profit or growth.

Ola Källenius: So on the first one, if we go all the way back to that original presentation, pillar two is called profitable growth. It's not called profit or growth; it's profitable growth. Listening carefully to what Mathias said in his presentation, it is still profitable growth, but it's not profit without growth. We do think that it matters, that if you invest into such a comprehensive innovation, technology, and product portfolio, you must have the ambition that you have success in the market with those products. When you go into a few segments where you literally have a wide spot at the moment, electric GLC or electric C-Class, and we know that that is the bulk of the premium electric volume in Europe, and you have no offering today, you must have an ambition to grow.

Speaker #3: It's profitable growth. And listening carefully to what Matthias said in his presentation, it is still profitable growth. But it's not profit without growth. And we do think that it matters that if you invest into such a comprehensive innovation, technology, and product portfolio, you must have the ambition that you have success in the market with those products.

Speaker #3: When you go into a few segments where you literally have a white spot at the moment—electric GLC or electric C-Class—and we know that that is the bulk of the premium electric volume in Europe, and you have no offering today, you must have an ambition to grow.

Speaker #3: So, profitable growth—and I believe that is the word we used, yeah—profitable growth remains the mantra.

Ola Källenius: So profitable growth, and I believe that is the word we used, yeah. Profitable growth remains the mantra. And maybe a bit of switch of gears is, as you can see, with the back or the support of the efficiency measures now and also moving forward, we believe we can generate and create ourselves, I mean, more headroom in terms of stepping up competitiveness without forgiving value, but stepping up the competitiveness also on the commercial side of things. The other question, in terms of what makes us confident that the net number, I mean, shouldn't look different than the one I'm telling you today here. I make one caveat on the slide, please pay attention to it.

Speaker #2: And maybe a bit of a switch of gears—this, as you can see, with a pack or the support of the efficiency measures. Now, and also moving forward, we believe we can generate and create ourselves and make more headroom in terms of stepping up competitiveness, without forgiving value, but stepping up the competitiveness also on the commercial side of things.

Speaker #2: The other question, in terms of what makes us confident that the net number shouldn't look different than the one I'm telling you today here.

Speaker #2: I made one caveat on the slide. Please pay attention to it. It was on the raw mets and all of the bridges. I think I gave—I mean, consciously separated—the raw met effect from the efficiency effect.

Ola Källenius: It was on the raw mats and all of the bridges I think I gave, I mean, consciously separated the raw mat effect from the efficiency effect, yeah. Obviously, we are exposed to risk, but also to opportunities in this respect. I think, I mean, other measures, I mean, are chiefly, I mean, behind us, as we think about, I mean, regulatory stuff. I mean, you mentioned the EU7 engines. Obviously, that's, I mean, quite a lot of content coming to the vehicles, but I think, I mean, we know what it is, and, I mean, that is, I mean, included and calibrated in the entire envelope I gave earlier today.

Speaker #2: Obviously, we are exposed to risk, but also to opportunities in this respect. I think, I mean, other measures, I mean, are chiefly, I mean, behind us.

Speaker #2: As we think about, I mean, regulatory stuff—I mean, you mentioned the EU7 engines. Obviously, that's quite a lot of content coming to the vehicles, but I think, I mean, we know what it is.

Speaker #2: And I mean, that is, I mean, included and calibrated in the entire envelope, I gave earlier today here.

Speaker #1: So, moving on, Christian, over to you.

Christina Schenck: So moving on, Christian, over to you.

Speaker #4: Yeah, hi. So first of all, could you detail the product mix dynamics within the top-end vehicle space in 2026, but also 2027? So, you know, the impact of AMG versus the refreshed S-Class.

Christian Ludwig: Yeah, hi. So first of all, could you detail the product mix dynamics within the top-end vehicle space in 2026, but also 2027? So, you know, the impact of AMG versus the refreshed S-Class. That's my first question. I can ask -- and then I have two more, which is, second question would be the net tariff headwinds. You detailed it for 2026, but please, if you could elaborate on post-production localization measures, what is the net impact? And also, how should we think about the net tariff impact as we head into 2027. And then lastly, just something specific to your China dealer restructuring efforts, what is the impact in 2026 on those for the P&L and for cash? Thanks.

Speaker #4: That's my first question. I can ask, and then I have two more. The second question would be the net tariff headwinds. You detailed it for 2026, but please, if you could, elaborate on post-production localization measures?

Speaker #4: What is the net impact? And also how should we think about the net tariff impact as we head into 2027? And then lastly, just something specific to your China dealer restructuring efforts.

Speaker #4: What is the impact in 2026 on those for the P&L and for cash? Thanks.

Ola Källenius: You want to take it? Yeah, I'll start with the first one to break it down in more detail for you on AMG. So if you look at the current portfolio, the entry point to the AMG brand are the entry vehicles on the current MFA2 architecture, so like an A 35, and then you have the full performance version with A 45. As we go into MMA and electrification, we're going all in on electric performance, which means that that entry sliver of the AMG sales sundowns in this year. That is why that affects the headline number to start with, but I want to emphasize that that is the lowest level of the AMG portfolio. What happens now on AMG is a very comprehensive product offensive in the next couple of years.

Speaker #3: Do you want to take it?

Speaker #2: Yeah, I'll start with the first one to break it down in more detail for you on AMG. So if you look at the current portfolio, the entry point to the AMG brand are the entry vehicles on the current MFA2 architecture.

Speaker #2: So like an A35. And then you have the full performance version with a 45. As we go into MMA, an electrification, we're going all in on electric performance, which means that that entry sliver of the AMG sales sundowns in this year, that is why that affects the headline number to start with.

Speaker #2: But I want to emphasize that that is the lowest level of the AMG portfolio. What happens now on AMG is a very comprehensive product offensive in the next couple of years.

Speaker #2: On the combustion side, led by the brand new, further developed six-cylinder, you can see that they came out with a statement now that it starts in the middle of this year with the GLC 53, which is one of the most important segments.

Ola Källenius: On the combustion side, led by the brand new six-cylinder, further developed six-cylinder, you can see that they came out with a statement now that it starts in the middle of this year with the GLC 53, which is one of the most important segments. The brand new V8 that has gone into this car, there's, of course, an AMG version of that, and that will find itself into a product next year. Stay tuned for how far that can go in terms of performance. There is some very exciting developments in the pipeline there. On the electric side, we're now going to reinvent performance electric vehicles.

Speaker #2: The brand-new V8 that has gone into this car—there's, of course, an AMG version of that. And that will find itself into product next year.

Speaker #2: And stay tuned for how far that can go in terms of performance there is some very exciting developments in the pipeline there. On the electric side, we're now going to reinvent performance electric vehicles.

Speaker #2: Some of you have had the chance to get some initial sneak previews. But it will be a mind-boggling performance where we try to pair it with the emotion for the ones that still have petrol in their veins.

Ola Källenius: Some of you have had the chances to get some initial sneak previews, but it will be mind-boggling performance, where we try to pair it with the emotion for the ones that still have petrol in their veins. And the signature flagship product in that offensive is, of course, the AMG GT that we will show in May as a world premiere, and it comes in the second half of this year. But that superior performance and that emotion is then rolled out into the whole portfolio. So you will have MMA versions of that, you will have MBE versions of that, et cetera, et cetera. So this run out and then run up for AMG, in particular, 2026, is a run out and then to prepare for a run up.

Speaker #2: And the signature flagship product in that offensive is, of course, the AMG GT that we will show in May as a world premiere. And it comes in the second half of this year.

Speaker #2: But that technology, that's superior performance and that emotion, is then rolled out into the whole portfolio. So you will have MMA versions of that.

Speaker #2: You will have MBE versions of that, et cetera, et cetera. So this run-out and then run-up for AMG, in particular, 2026 is a run-out and then to prepare for a run-up.

Speaker #2: So I think we're going to then see a run-out and then into 2027, very, very good momentum on AMG. That's what's going on.

Ola Källenius: So I think we're going to then see a run out, and then into 2027, very, very good momentum on AMG. That's what's going on.

Speaker #3: And on the other two questions, Christian?

Harald Wilhelm: On the other two questions, Christian?

Speaker #4: Just on the S-class, you didn't mention the S-class.

Christian Ludwig: Just on the S-Class, you didn't mention the S-Class, did you?

Speaker #2: Yeah, S-Class. Well, S-Class, the production starts in a couple of months from now. Here it is. You saw the Maybach version of it yesterday.

Ola Källenius: Yeah, S-Class, well, S-Class, the production starts in a couple of months from now. Here it is. You saw the, the Maybach version of it yesterday. And then with the lead times, I don't know, we hit the China in September-ish, United States in the summer. We will then be in Europe in roughly May-ish, type timeframe. So of course, you, you first go down, and then you start going up. Full firepower of the S-Class is 2027 and forward.

Speaker #2: And then with the lead times, I don't know, we hit China in September-ish, United States in the summer. We will then be in Europe in roughly May-ish type timeframe.

Speaker #2: So, of course, you first go down and then you start going up. Full firepower of the S-class is 2027 and forward.

Speaker #3: So when we think about the mix of the top-end vehicle space, is there a significant shift then with the S-class and the AMG?

Christian Ludwig: So when we think about the mix of the top-end vehicle space, is there a significant shift then with the S-Class and the AMG?

Speaker #2: 2027 growth, change over year 2026.

Ola Källenius: 27 growth, change over year 26.

Speaker #3: So your second question, I think, was on the tariff impact and any localization. So we'll have, I mean, the run-rate impact of the tariffs in 2026 as outlined earlier, stepping up from 110 basis points in 2025 to, call it, 150. Obviously, in 2025, in the first quarter, there weren't, I mean, any incremental tariffs.

Harald Wilhelm: So your second question, I think, was on the tariff impact and any localization. So we'll have them in the run rate impact of the tariffs in 2026, as I outlined earlier, stepping up from 110 basis points in 2025 to call it 150, is obviously in 2025. In the first quarter, there weren't any incremental tariffs, so I think that explains the 2026 number. Then in that number, you already have the localization of the GLE in the US, in China, sorry. But, I mean, the vast majority of the incremental tariff headwind is anyhow the US tariffs, mainly, which impact the imports into the US.

Speaker #3: So I think that explains the 2026 number. Then in that number, you already have the localization of the GLE in the US in China, sorry.

Speaker #3: But, I mean, the vast majority of the incremental tariff headwind is, anyhow, the US tariffs—I mean, which impact the imports into the US.

Harald Wilhelm: So as we have the target to grow in the US towards the 400, as Mathias pointed out, that has, I mean, a tariff impact going along with it. That's why in the midterm, I said, I mean, that could go up, I mean, from 150 to 200 basis points. Yes, in the longer midterm, or, I mean, towards the end of the decade, I think I mentioned it during the localization section, there is clearly an opportunity with next generation GLC to come. That could be a significant mitigant to that tariff, but I think that is probably a bit outside the midterm territory we were using in the financial guidance outlook. Then, on the dealer section, Oliver, you want to take it or?

Speaker #3: So, as we have the target to grow in the US towards the 400, as Matthias Min pointed out, that has a tariff impact going along with it.

Speaker #3: That's why in the midterm, I said, I mean, that could go up, I mean, from 150 to 200 basis points. Yes, in the longer midterm or, I mean, towards the end of the decade, I think I mentioned it in the localization section, there's clearly an opportunity with next-generation GLC to come.

Speaker #3: That could be a significant mitigant to that tariff. But I think that is probably a bit outside the midterm territory we were using in the financial guidance outlook.

Speaker #3: Then on the dealer section, Olivier—I mean, you want to take it, or?

Speaker #1: Maybe I can take it. So, first of all, the dealers in China—they are more than just part of the process. There is a very close and intensive partnership.

Mathias Geisen: Maybe I can take it. So first of all, the dealers in China, they are more than just part of the process. There is a very close and intensive partnership, so we walk the whole strategy for China hand in hand with our dealer partners. That is important 'cause we deploy new formats to acquire customers. We're going to bring something for the top-end vehicles, which I think is attractive in the customer journey. We complement it with the uplifted digital journey. Now, this is hand in hand because also this kind of recalibration of the density of the network is at the benefit of our dealer partners, because it is on the aftersales revenue and generally on the profitability for the network and uplift.

Speaker #1: So we walk the whole strategy for China, hand in hand with our dealer partners. That is important because we deploy new formats to acquire customers.

Speaker #1: We are going to bring something for the top-end vehicles, which I think is attractive and improves the customer journey. We complement it with the uplifted digital journey.

Speaker #1: Now, this is hand in hand because also this kind of recalibration of the density of the network is to the benefit of our dealer partners, because it is on the after-sales revenue and generally on the profitability for the network and uplift.

Speaker #1: So I would say we are well on track with the figures Harald presented to proceed.

Mathias Geisen: So, I would say we are well on track with the figures Harald presented to proceed.

Speaker #4: I take one more question in the room. And then I'll give people online the chance to also ask a question. Henning, over to you.

Christina Schenck: I'll take one more question in the room, and then, I'll give people online the chance to also ask a question. Henning, over to you.

Speaker #3: Yeah, thank you very much. To Harald, please, thanks for being so forthcoming with your bridges. I just have a clarification, please, because I think when you spoke about 2026 to the midterm, I think you mentioned the 1 percentage point headwind from tariff and FX again.

Henning Cosman: Yeah, thank you very much. To Harald, please. Thanks for being so forthcoming with your bridges. I just have a clarification, please, because I think when you spoke about 26 to the midterm, I think you mentioned 1 percentage point headwind from tariff and FX again, and I just wanted to make sure you actually meant that, or is it from the starting point of 4? Is it just the 4 efficiency and 1.5 volume structure price?

Speaker #3: And I just wanted to make sure you actually meant that. Or is it from the starting point of four? Is it just the four efficiency and one and a half volume structure price?

Speaker #2: Yeah, to clarify, so the starting point 2026, so the 3 to 5, again, take the midterm. The midpoint as a reference. Minus 1 percent from tariffs and FX incremental tariffs and FX.

Ola Källenius: Yeah, to clarify, so the starting point, 26, so the 3 to 5. Again, take the mid-term, the midpoint as a, as a reference, from tariffs and FX, incremental tariffs and FX, and then the 1.5, when we talked in terms of top line volume, mix pricing and BEV, and around 4 on the efficiencies.

Speaker #2: And then the one and a half, I mean, we talked in terms of top-line volume, mix, pricing, and BEF, and around four on the efficiencies.

Speaker #3: OK, so another one for the period from. OK, thank you.

Henning Cosman: Okay, so another one for the period from.

Ola Källenius: Another one.

Henning Cosman: Okay, thank you.

Speaker #2: Tariffs and FX.

Ola Källenius: Tariffs and FX.

Speaker #3: Yes, and sorry, that's mainly related to hedges rolling off, yeah? The delayed effect of the FX coming through.

Henning Cosman: Yes. And sorry, that's mainly related to hedges rolling off, yeah? The delayed effect of the FX coming through.

Speaker #2: In 2026, I think we're still well covered. Also, at a pretty good rates when it comes to the US dollar and also on the renminbi.

Ola Källenius: In 2026, I think we're still well covered. Also, at a pretty good rates when it comes to the US dollar and also on the renminbi. So I mean, if current spot and more kind of, yeah, call it towards 1.20 kicks in, and the other currencies, interestingly enough, I mean, only the euro is strong and continue where they are, obviously, that creates some further headwind for the years post to 2026.

Speaker #2: So, I mean, if current spot and more, kind of, yeah, call it, towards the 120 kicks in, and the other currencies, interestingly enough, I mean, only the euro is strong. I mean, continue where they are, obviously that creates some further headwind for the years post the 2026.

Speaker #3: Thank you. And the second question is on China, please. And the profitability there. I think at the CMD, we talked about trying to protect a double-digit margin.

Henning Cosman: Thank you. And the second question is on China, please, and the profitability there. I think at the CMD, we talked about trying to protect a double-digit margin. I think you were coming from still 15% or so in 2024. I don't think you probably deliberately didn't give a pinpoint update today, but if we could just talk conceptually, is that going lower before it's starting to go higher? And if you could give any color for profitability between imports and local, if that's a good way to just explore it a little bit further. Thank you.

Speaker #3: I think you were coming from still 15 percent or so in 2024. I don't think you probably deliberately didn't give a pinpoint update today.

Speaker #3: But if we could just talk conceptually, is that going lower before it's starting to go higher? And if you could give any color for profitability between imports and local if that's a good way to just explore it a little bit further.

Speaker #3: Thank you.

Speaker #1: Charlotte? We made a slight, which we called—we deliver on the targets we promised here. And in 2025, we still delivered a double-digit margin in the joint venture.

Christina Schenck: Sure. Um-

Mathias Geisen: ... We made a slide, which we called We Deliver on the Targets We Promised Here, and in 2025, we still delivered a double-digit margin in the joint venture. 2026, as characterized by all the ramp-ups, it is going to be down year over year. Then we will have, pretty much second half of 2026, and then transitioning into 2027, the benefit of, like, a vehicle like the GLE long wheelbase, providing additional profitability. At the same time, we see the facelift cycle for GLC C-Class, which also get their combustion side. What is definitely a topic of intensive work is the profitability in China for the electric vehicles. So this will slightly weigh on the profitability on, in the BVAC.

Speaker #1: 2026, as characterized by all the ramp-ups, it is going to be down year over year. Then we will have pretty much second half of 2026 and then transitioning into 2027.

Speaker #1: The benefit of a vehicle like the GLE long-wheelbase providing additional profitability—at the same time, we see the facelift cycle for GLC, C-Class, which also got their combustion side.

Speaker #1: What is definitely a topic of intensive work is the profitability in China for the electric vehicles. So, this will slightly weigh on the profitability in the BEV acc.

Speaker #1: But that is why we embark on this mission of a deep localization there, taking out cost, which is increasing the resilience on the combustion side as well as improving the resilience on the electric vehicles.

Mathias Geisen: But, that is why we embark on this mission of a deep localization there, taking out cost, which is increasing the resilience on the combustion side, as well as improving the resilience on the electric vehicles. So yes, year over, first, delivered on target for 2025. Second, 2026, slightly down. 2027, we will do our best to return to where we were.

Speaker #1: So yes, year-over-year, first delivered on target for 2025. Second, 2026, slightly down. 2027, we will do our best to return to where we were.

Speaker #4: So, let's move on to the telephone line. We have questions there, and I would start with Patrick Hummel.

Christina Schenck: So, let's move on to the telephone line. We have questions there, and I would start with Patrick Hummel.

Speaker #5: Hello, good morning, Patrick from UBS. Thanks for taking my questions. My first one would be a clarification about cash returns and DTG specifically. Harald, thanks for all the color.

Patrick Hummel: Hello, good morning. It's Patrick from UBS. Thanks for taking my questions. My first one would be a clarification about cash returns and DTG, specifically. Harald, thanks for all the color on that specific slide. You highlighted EUR 2 billion of M&A inflows. I was just wondering, Athlon, there were some media articles suggesting that could be worth about EUR 1 billion, some additional German distribution outlets, I guess that's also EUR a few hundred million. So that would leave a relatively small amount for DTG, if you know, the total M&A bucket is about EUR 2 billion. Should we read it that way, or could it just well be if you execute all of these transactions, DTG, Athlon, and the distribution networks, that the M&A-related inflows would exceed EUR 2 billion?

Speaker #5: On that specific slide, you highlighted $2 billion of M&A inflows. I was just wondering, Athlon—there were some media articles suggesting that could be worth about a billion.

Speaker #5: Some additional German distribution outlets—I guess that's also a few hundred million. So that would leave a relatively small amount for DTG if, you know, the total M&A bucket is about $2 billion.

Speaker #5: Should we read it that way? Or could it just well be, if you execute all of these transactions, DTG, Athlon, and the distribution networks that the M&A-related inflows would exceed $2 billion?

Speaker #5: And would that also directly translate into additional cash return to shareholders? Or would you say it's the $6 billion that we talked about—$5.1 billion is the dividend, and the $1.7 billion remaining from the existing buybacks?

Patrick Hummel: Would that also directly translate into additional cash return to shareholders, or would you say it's the EUR 6 billion that we talked about, EUR 5.1 billion is, is the dividend, and the EUR 1.7 billion remaining from the existing buyback? Whatever happens on the disposal front, the, the cash return this year won't exceed EUR 6 billion. Am I misreading that? I have a second question then.

Speaker #5: So, whatever happens on the disposal front, the cash return this year won't exceed $6 billion. Am I misreading that?

Speaker #3: I have a second question there.

Speaker #1: Thanks, Patrick. Well spotted. I think the numbers—I mean, you reminded us, I think—are correct in terms of Athlon, in terms of the own retail divest potential.

Harald Wilhelm: Thanks, Patrick. Well spotted. I think the numbers, I mean, you reminded us, I think, correct in terms of Athlon, in terms of, the, own retail divest potential. And, I think the EUR 2 billion we put on the chart, I mean, should not, be seen as a cap, in terms of, cash generation from M&A. Maybe a bit of a prudent approximation. Await the financial statements coming out early March. As I said earlier, you will see assets held for sale. I think that rather gives an indication in terms of, the size, so the order of magnitude we have in mind on DT. So does it mean therefore, M&A cash proceeds could be above EUR 2 billion? That could be a distinct possibility.

Speaker #1: And I think the $2 billion, when you put it on the chart, should not be seen as a cap in terms of cash generation from M&A.

Speaker #1: Maybe a bit of a prudent approximation. A way the financial statements coming out early March, as I said earlier, you will see assets held for sale I think that would be a rather gives an indication in terms of the size or the order of magnitude we have in mind on DT.

Speaker #1: So does it mean, therefore, M&A cash proceeds could be above $2 billion? That could be a distinct possibility. Let's talk about it when we're getting there.

Harald Wilhelm: Let's talk about it when we're getting there. I think the message here is a solid underlying cash flow of more than EUR 4 billion on the industrial side, including a significant cash out from the restructuring program. So in terms of underlying cash generation, I think that's a pretty reasonable number. And then this potential of cash generation on top of it. So I think, I mean, the message here in terms of potential for shareholder return and our commitment on shareholder return, I think that should should be attractive for investors, and I think that should also be a bridge to look through somehow 2026, while we expand the margin in 2027 forward.

Speaker #1: I think the message here is a solid underlying cash flow of more than $4 billion on the industrial side, including a significant cash out from the restructuring program.

Speaker #1: So, in terms of underlying cash generation, I think that's a pretty reasonable number. And then there's this potential of cash generation on top of it.

Speaker #1: So I think, I mean, the message here in terms of potential for shareholder return and our commitment on shareholder return, I think that should be attractive for investors.

Speaker #1: And I think that should also be a bridge to look through somehow 2026 while we expand the margin in 2027 forward.

Speaker #5: Thank you, Harald. My second question, I guess, is for Matthias or Paula. The next-generation A-class or whatever it's going to be called, when we think back at the Monaco CMD, you basically painted a picture that suggested that, you know, the very low end of your entry segment is not very attractive, neither from a margin standpoint.

Patrick Hummel: Thank you, Harald. My second question, I guess, is for Mathias or Ola. The next generation A-Class or whatever it's going to be called, when we think back at the Monaco CMD, you basically painted a picture that suggested that, you know, the very low end of your entry segment is not very attractive, neither from a margin standpoint, maybe also not from a CO2 compliance standpoint. So I'm just wondering, what changed your mind? Why do you think you need this model, and what can you do to avoid margin dilution? Is it maybe just that, you know, the cost structures in Rastatt are what they are, and you have to have a certain capacity utilization there?

Speaker #5: Maybe also not from a CO2 compliance standpoint. So I'm just wondering, what changed your mind? Why do you think you need this model? And what can you do to avoid margin dilution?

Speaker #5: Is it maybe just that, you know, the cost structures in Russia are what they are, and you have to have a certain capacity utilization there?

Speaker #5: Or, I mean, I get the point about young buyers getting sort of attracted to the brand. But, you know, the financial impact—at least in the history of that model range—has been rather dilutive.

Patrick Hummel: Or, I mean, I get the point about young buyers getting sort of attracted to the brand, but, you know, the financial impact, at least in the history of that model range, has been rather dilutive. And if you can just share a bit more behind your thought process, why you bring this model back or bring a successor. Thank you.

Speaker #5: And if you can just share a bit more, beyond your thought process, why you bring this model back or bring a successor. Thank you.

Speaker #1: Patrick, good to hear from you. I'll do the financial mechanics and let Matthias do the market. Now we have the MMA architecture fully industrialized and all the technologies available.

Ola Källenius: Patrick, good to hear from you. I'll do the financial mechanics and let Mathias do the market. Now, we have the MMA architecture fully industrialized, and all the technologies available. And when we looked at this equation again, weighing in what it means for the overall market presence in Europe, and it's really about Europe—for a very reasonable investment amount, very reasonable. And with the variable cost projection that Harald was alluding to, the sum of those financial mechanics said, this can meet our lower-end threshold, I would say, Harald. But it does play a role in the market, and I want to let Mathias reflect upon that.

Speaker #1: And when we looked at this equation again, weighing in what it means for the overall market presence in Europe—and it's really about Europe—for a very reasonable investment amount, very reasonable.

Speaker #1: And with the variable cost projection that Harald was alluding to, the sum of those financial mechanics said this can meet our lower-end threshold, I would say, Harald.

Speaker #1: But it does play a role in the market. And I want to let Matthias reflect upon that.

Speaker #3: Absolutely. I mean, Europe, as I pointed out in my presentation as well, is extremely important for us. It's a market where this segment is being well served.

Mathias Geisen: Absolutely. I mean, Europe, as I pointed out in my presentation as well, is extremely important for us. It's a market where this segment is, is being well-served, and, the A-Class, as it is today, is a vehicle where the average age of our customers is seven years younger than for all other Mercedes-Benz products on average. So that means we have the early opportunity getting younger customers into our vehicles. Plus, and I mentioned the topic of our new unit, we have very attractive downstream business combined with it, so we believe that it absolutely makes sense in Europe to have this product available, including the downstream effect. It will definitely a profitable case, and very important for us to get customers acquainted with our brand at the, very early beginning.

Speaker #3: And the A-Class, as it is today, is a vehicle where the average age of our customers is seven years younger than for all other Mercedes-Benz products on average.

Speaker #3: So that means we have the early opportunity to get younger customers into our vehicles. Plus, and I mentioned the topic of our new unit, we have very attractive downstream business combined with it.

Speaker #3: So we believe that it absolutely makes sense in Europe to have this product available, including the downstream effect. It will definitely be a profitable case and very important for us to get customers acquainted with our brand at the very early beginning.

Speaker #1: And the designers did present us something in 2025 when I saw it. I just thought to myself, it's hot as hell. I want that.

Ola Källenius: The designers did present us something in 2025. When I saw it, I just thought to myself: "It's hot as hell. I want that." That's the irrational part of the equation.

Speaker #1: That's the irrational part of the equation.

Speaker #3: You're a new company, Karthan.

Mathias Geisen: Your new company car, then.

Ola Källenius: Uh.

Speaker #4: OK. We do one last.

Christina Schenck: Okay, we do one last-

Speaker #5: Thank you very much.

Ola Källenius: Thank you very much.

Speaker #4: Sorry, Patrick. We do one last question in the room. I'll take a look for hands up, Stephen.

Christina Schenck: Sorry, Pavel. We do one last question in the room. I'll take a look for hands up. Steven?

Speaker #5: Thank you, Stephen Reitman from Bernstein in London. Question on China again. Obviously, you talk about the potential of filling the white spaces with the new BEV platforms that you're coming out with, the new BEV models like GLC Electric and such like.

Stephen Reitman: Thank you. Steven Goldman from Bernstein in London. Question on China again. Obviously, you talk about the potential of filling the white spaces with the new BEV platforms that you're coming out with, new BEV models like GLC electric and such like. Could you just comment on the research you're doing on the Chinese customers? To what extent the customers have gone away? How much do you expect them to come back? What is the dealers' confidence in the product portfolio, which obviously you've shown to them during your journey? Thank you.

Speaker #5: Could you just comment on the research you're doing on the Chinese customers? To what extent have the customers gone away? How much do you expect them to come back?

Speaker #5: What is the dealers' confidence in the product portfolio, which obviously you've shown to them during your journey? Thank you.

Speaker #1: Most certainly. Let's talk about the Chinese customer—and obviously, maybe one of the most demanding customers in the world. So on average, for Mercedes it's 37, S-Class 39, I think Maybach just sits directly on 40.

Mathias Geisen: Most certainly. Let's talk about the Chinese customer, and obviously, maybe one of the most demanding customers in the world. So on average, for Mercedes, 37, S-Class, 39, I think Maybach just sits directly on 40. If you do a poll on what does Mercedes-Benz still mean for customer groups, it is still, for 65%, an icon of success, and they aspire to own such a car. What is today one of the biggest detractor, if you will, and that is, I guess, where your question is aiming to, the detractor could be intelligence. Can Mercedes offer the same level of ADAS infotainment updatability as they have seen by other competitors? And that is what we have shown today, that with the tech stack we have developed, we close that, so to say, gap, where you have it.

Speaker #1: If you do a poll on what this Mercedes-Benz still means for customer groups, it is still at 65%. And I can offer success.

Speaker #1: And they aspire to own such a car. What is today one of the biggest detractors, if you will—and that is, I guess, where your question is aiming to—the detractor could be intelligence.

Speaker #1: Can Mercedes offer the same level of ADAS infotainment updatability as they have seen by other competitors? And that is what we have shown today, that with the tech stack we have developed, we close that, so to say, gap where you have it.

Speaker #1: Specific vehicles in our portfolio, like the E-class, they massively contribute to the highest average TAP in the market. They outsell any competitor because they already have a level two-plus system.

Mathias Geisen: Specific vehicles in our portfolio, like the E-Class, they massively contribute to the highest average TAP in the market. They outsell any competitor because they already have a level two-plus system. They don't have the point-to-point navigation. That is why we cascade this tech stack now into each and every segment. Returning back to those customers, we have more than 7 million and still growing customer base, and we have also, due to the combination with Financial Services, now the opportunity to strive with a new offering, which were maybe on the fence, waiting. Can you take away this detractor reason? So overall, the ambition to own a Mercedes-Benz is not fading. The attractivity to buy one is elevated and is going to be elevated with each and every model we are offering.

Speaker #1: They don't have the point-to-point navigation. That is why we cascade this tech stack now into each and every segment. Returning back to those customers, we have more than 7 million—and a still growing customer base.

Speaker #1: And we have also, due to the combination with Financial Services, now the opportunity to strive with a new offering, which were maybe on the fence waiting.

Speaker #1: Can you take away this detractor reason? So overall, the ambition to own a Mercedes-Benz is not fading. The attractivity to buy one is elevated and is going to be elevated with each and every model we are offering.

Speaker #1: So, therefore, we are pretty confident on it. But still, realistically, also showing where have we lost customers? What were the reasons, and how can we get them back?

Mathias Geisen: Therefore, we are pretty confident on it, but still realistically also showing where have we lost customer, what were the reasons, and how to get them back. That was on my slide, 100% China fit. We have to offer more comfort. We have to offer more space. Especially on the SUV side, you have seen this additional race of space and larger vehicles at lower price points. So that is something where all our product decisions for the next 24 months kick in to cater for that.

Speaker #1: That was on my slide: 100% China fit. We have to offer more comfort. We have to offer more space. Especially on the SUV side, you have seen this additional race for space and larger vehicles at lower price points.

Speaker #1: So, that is something where all our product decisions for the next 24 months kick in to cater for that.

Speaker #5: So basically, you're saying the Chinese customers haven't been spoiled by these very cheap offerings with a lot of high-tech at very low price points?

Stephen Reitman: So basically, you're saying the Chinese customers haven't been spoiled by these very cheap offerings of, with a high lot of high tech, at very low price points.

Speaker #1: Especially on the lower segments. Especially on the lower segments. And if they are in an all-out price war against each other, that is when we choose to be a little bit more cautious.

Ola Källenius: Especially on the lower segments, and if they are in an all-out price war against each other, that is when we chose to be a little bit more cautious, as Oli mentioned before.

Speaker #1: As Oli mentioned before.

Speaker #5: And how do you convince them also? I mean, or is it very clear to them—the key characteristics of the Mercedes and the legacy brands—about the long-term value of the vehicle, the residual value, which clearly among the cheapest Chinese cars doesn't seem to be a consideration.

Stephen Reitman: And how do you convince them also, I mean, or is it very clear to them, the key characteristics of Mercedes and the legacy brands about the long-term value of the vehicle, you know, the residual value, which clearly, among the cheapest Chinese cars, doesn't seem to be a consideration. People think these are almost like throwaway products after four or five years.

Speaker #5: People think these are almost like throwaway products after four or five years.

Speaker #3: Exactly, sir. And that is: what kind of a product are you willing to throw away? The more pricey the vehicle gets, the more you are willing to also look after your residual value.

Mathias Geisen: Exactly, sir, and that is, what kind of a product are you willing to throw away? The more pricey the vehicle gets, the more you are willing to also look after your residual value. A lot of the equation is also uncertain to that extent. I personally visited a used car market south of Beijing to take a look, how are actually some of the other cars returning after two years, three year? What about their longevity? What about their substance quality over time?

Speaker #3: A lot of the equation is also uncertain. To that extent, I personally visited a used car market, south of Beijing, to take a look at how actually some of the other cars are returning after two years, three years.

Speaker #3: What about their longevity? What about their substance, quality over time? I think there is something that is sometimes questioned, and that is safety. It is only questioned until something happens.

Harald Wilhelm: ... I think there is something what is sometimes questioned, that is safety. It is only questioned until something happens, and those are the moments when I would say our continuation in these core values, our communication to the strength and to the attributes of the brand, they then yield results. Obviously, we cannot put this at the absolute forefront or at every point in time, but it is seen, perceived, and then obviously convincing when others might have cut a corner here or there. Yes, and it alludes to the entry segment question, and probably an A-Class is, has to be completely differently assessed in China. Therefore, it is a European and not a China. That's due to size, expectations of vehicle formats.

Speaker #3: And those are the moments when I would say our continuation in these core values, our communication of the strength and the attributes of the brand—they then yield results.

Speaker #3: Obviously, we cannot put this at the absolute forefront or at every point in time. But it is seen, perceived, and then obviously convincing when others might have cut a corner here or there.

Speaker #3: So yes, for—and it alludes to the entry segment question—and probably an A-Class has to be completely differently assessed in China. Therefore, it is a European and not a China.

Speaker #3: That's due to size, expectations of vehicle formats. But our more comfort, more space, more intelligence should take away those detractor reasons, which might be existing right now.

Harald Wilhelm: Our more comfort, more space, more intelligence, should take away those detractor reasons which might be existing right now.

Speaker #5: Thank you.

Ola Källenius: Thank you.

Speaker #2: So, thank you very much for your interest and for all of your questions. I will be handing over to Willem now to leave some time for questions from the media.

Harald Wilhelm: So thank you very much for your interest and all of your questions. I would be handing over to Willem now, to leave some time for questions from media.

Speaker #4: Yeah, so we are now switching to German. There's, of course, translation available for everybody who's not fluent in German. Wir starten jetzt den.

Willem Spelten: Yeah. So we are now switching to German. There's, of course, translation available for everybody who's not fluent in German.

Harald Wilhelm: Okay, let us now start with the journalist part. We still have half an hour for questions. We also start here with questions from the room, and we'll also check for questions that online participants might have. Who would like to start with the first question? I'd be interested in what, how you define medium term. Does that mean 2027, 2028, 2029, or does it mean, oh, let's just wait and see, but we're not really sure. What is midterm? Well, thank you very much for the question. Well, this is something that is just was left undefined. Well, it's not 2027, otherwise, we would have said it's 2027. However, why is this important? Why do we call this midterm? Well, we live in a time where we are faced with volatilities, insecurities, and the like.

Speaker #2: OK, let us now start with the journalist part. We still have half an hour for questions. We also start here with questions from the room.

Speaker #2: And we'll also check for questions that online participants might have. Who would like to start with the first question? I'd be interested in how you define medium-term.

Speaker #2: Does that mean 2027, 2028, 2029? Or does it mean, oh, let's just wait and see, but we're not really sure? What is mid-term? Well, thank you very much for the question.

Speaker #2: Well, this is something that just was left undefined. Well, it's not 2027—otherwise, we would have said it's 2027. However, why is this important?

Speaker #2: Why do we call this mid-term? Well, we live in a time where we are faced with volatilities and insecurities and the like. So even though we are confident in the plan as such, we are not in a position to say which quarter this will materialize in, basically.

Harald Wilhelm: So even though we are confident in the plan, as such, we are not in a position to say which quarter this will materialize in, basically. But it's not 2027, but it's also not the end of the decade. This doesn't leave so much room of maneuver for speculation as to which year this might refer to. So I would not just lead the substrate, so, after 27, but before the end of the decade. Next question, please. Okay, so let's just ask another question. I have an additional question on the US tariffs and the impact on your profit. You told me this in margins and points. Can you tell me this in absolute numbers? So what was the impact of US tariffs in 25, and what do you expect the impact to be in 26 in absolute numbers?

Speaker #2: But it's not 2027, but it's also not the end of the decade. This doesn't leave so much room for maneuver for speculation as to which year this might refer to.

Speaker #2: So I would not just lead the substrate. So after 2027, but before the end of the decade. Next question, please. OK, so let's just ask another question.

Speaker #2: I have an additional question on the US tariffs and the impact on your profit. You told me this in margins and points. Can you tell me this in absolute numbers?

Speaker #2: So, what was the impact of U.S. tariffs in 2025? And what do you expect the impact to be in 2026, in absolute numbers? And then also, a question on China.

Harald Wilhelm: Then also a question on China. I heard a little bit about, well, Mr. Blume of Volkswagen saying that in China, he's looking at an 80% decline in the luxury business, and he's not-- he doesn't believe that's going to recover anytime soon. So I'd be interested in finding out what your stand on that is. How do you think the luxury segment is going to develop in China in 2026? Well, the first question is, if you just take the passenger car revenue in 2025, and with the outlook that we gave for 2026, so the passenger car revenue figures should remain the same, around EUR 100 billion. You know, that's the ballpark we're talking about, and then times 1.1% from 2025.

Speaker #2: I heard a little bit about, well, Mr. Blume of Volkswagen saying that in China, he's looking at an 80% decline in the luxury business.

Speaker #2: And he's not—he doesn't believe that it's going to recover anytime soon. So I'd be interested in finding out what your stand on that is.

Speaker #2: How do you think the luxury segment is going to develop in China in 2026? Well, the first question is, if you just take the passenger car revenue in 2025 and with the outlook that we gave for 2026—so the passenger car revenue figures should remain the same, around $100 billion.

Speaker #2: That's the ballpark we're talking about. And then, times 1.1% for 2025. So, $1 billion was the impact that we saw in the tariff impact in 2025.

Harald Wilhelm: So EUR 1 billion was the impact that we saw in the tariff impact in 2025, and it's going to go up in 2026 because we'll have a full year impact, so it's going to be a significant number. So thank you very much for asking the question, because very often you look at the percentage points and you're like, well, it sounds so little, but it's actually a lot of money.

Speaker #2: And it's going to go up in 2026, because we'll have a full-year impact. So it's going to be a significant number. So thank you very much for asking the question, because it varies often.

Speaker #2: You look at the percentage points, and you're like, well, it sounds so little. But it's actually a lot of money. About China, I don't think it's a secret that consumption, especially in the upper price bandwidth, is a bit subdued for the consumer mood.

Ola Källenius: About China, I don't think it's a secret that consumption, especially in the upper price bandwidth, is a bit subdued. So the consumer mood is a bit gloomy, and this also includes things like coffee that people buy at a discounter, for example. There is a certain degree of price attrition, and it is definitely a problem that we still have the real estate issue, and there is certainly a correlation to be seen when it comes to being willing to spend on luxury goods. The problems mentioned by our colleagues from other car manufacturers, I don't see for us. We have lost 19% in our segment. The total market went down by 15%, which means for 2026.

Speaker #2: It's a bit gloomy. And this also includes things like coffee that people buy at a discounter, for example. There is a certain degree of price attrition.

Speaker #2: And it is definitely a problem that we still have the real estate issue. And there is certainly a correlation to be seen when it comes to being willing to spend on luxury goods.

Speaker #2: The problems mentioned by our colleagues from other car manufacturers I don't see for us. We have lost 19% in our segment. The total market went down by 15%, which means for 2026.

Speaker #2: However, products, as Ola said, like the S-Class, GLS, S-Class, and Maybach, have gone past the first half of their life cycle. So they are going to be refreshed, including the intelligence that we build into these vehicles.

Ola Källenius: However, products, as Ola said, like the S-Class, GLS, S-Class, and Maybach, have gone past the first half of their life cycle, so they are going to be refreshed, including the intelligence that we build into this, these vehicles. And I think this will give us a chance to see a stimulation in sales of these vehicles.

Speaker #2: And I think this will give us a chance to see a stimulation in sales of these vehicles. OK, Mr. Engel, please. Two questions. First of all, cash commit will be the biggest plant in Europe in the future.

Harald Wilhelm: Okay, Mr. Ingolstadt, please.

Ola Källenius: Two questions. First of all, Kecskemét will be the biggest plant in Europe in the future. Why do you invest so much into there? I mean, you mentioned the cost of energy, of labor. Are these the only reasons, or are the framework conditions, regulatory conditions, also a reason? Is everything easier there? And the other thing is exports from China, not to the US, not to the EU. But do you expect exports from China, or exports could push out exports from Europe in other regions of the world? Or do you want to tap into new consumer groups, or do you see a push out effect already, or do you expect such an effect? And if so, how big would it be?

Speaker #2: Why do you invest so much into there? I mean, you mentioned the cost of energy, of labor. Are these the only reasons? Or are the framework conditions, regulatory conditions, also a reason?

Speaker #2: Is everything easier there? And the other thing is exports from China—not to the US, not to the EU. But do you expect exports from China could push out exports from Europe in other regions of the world?

Speaker #2: Or do you want to tap into new consumer groups? Or do you see a push-out effect already? Or do you expect such an effect?

Speaker #2: And if so, how big would it be? On your first question, if we had just some sort of industrial plant—well, like the automotive industry—all dimensions in Eastern Europe are more attractive if you want to invest.

Ola Källenius: On your first question, if we had just some sort of industrial plan, well, like the automotive industry, all dimensions in Eastern Europe are more attractive if you want to invest, and this applies to us as well. It's more attractive to invest in Eastern Europe, but we have a long-standing tradition in Kecskemét. It's a fantastic team there, just like in Germany, and I would like to thank all the employees and workers who are listening right now. We have a very modular strategy, so Kecskemét really suggests itself for using this. And then we have greenfield sites, and we have a new brownfield site. So we really have the chance to perfect all the processes in addition, and on top of what you can do in an existing plant.

Speaker #2: And this applies to us as well. It's more attractive to invest in Eastern Europe, but we have a long-standing tradition in cash commit. It's a fantastic team there, just like in Germany.

Speaker #2: And I would like to thank all the employees and workers who are listening right now. We have a very modular strategy, so cash commit really suggests itself for using this. And then we have greenfield sites.

Speaker #2: And we have a new brownfield site, so we really have the chance to perfect all the processes in addition and on top of what you can do in an existing plant.

Speaker #2: And on top of that, we can remain CO₂ neutral right from the start. So we are really at the spearhead when it comes to decarbonizing our production.

Ola Källenius: On top of that, we can remain CO2 neutral right from the start. So we are really at the spearhead when it comes to decarbonizing our production in Kecskemét. As regards the streams of goods around the globe, well, the glass is not always and everywhere half empty, even though 2025 was really a challenging year for global trade. But adopting a middle or long-term view, there are some signals. Free trade agreement, I'm thinking of Mercosur, and I assume that at the end of the day, the European Parliament will finally reach a conclusion, and I think they want to have some kind of preliminary approval and then the formal approval. But also the signal that comes from the free trade agreement with India. When it comes to global trade, there are also certain impulses that induces to believe that the situation might improve.

Speaker #2: In cash commit. As regards the streams of goods around the globe, well, the glass is not always and everywhere half empty. Even though 2025 was really a challenging year for global trade.

Speaker #2: But adopting a middle- or long-term view, there are some signals: the free trade agreement. I'm thinking of Mercosur. And I assume that, at the end of the day, the European Parliament will finally reach a conclusion.

Speaker #2: And I think they want to have some kind of preliminary approval, and then the formal approval. But also the signal that comes from the Free Trade Agreement with India.

Speaker #2: When it comes to global trade, there are also certain impulses that induce us to believe that the situation might improve. And I don't know if it was you or Matthias who said, when Thailand does a deal with China and suddenly there are no tariffs imposed—I mean, it's obvious that the youth, the production structures that you have in China...

Ola Källenius: I don't know if, if it was you or Mathias, who said when Thailand does a deal with China and suddenly there are no tariffs imposed, I mean, it's obvious that they use the production structures that you have in China. So we also have such tactical changes to bear in mind. Thank you. Rachel Moore from Reuters. My first question is about the decline in sales in China. Can you give us a figure for 2026, and do you plan to adjust prices because of that? And another question regarding the push ahead in Europe. What do you think of local content measures? Do you think these make sense? Maybe first Oli, and then Ola. Well, we said that in 2026, sales will remain below 25. This is our expectation.

Speaker #2: So we also have such tactical changes to bear in mind. Thank you. My first question is about the decline in sales in China. Can you give us a figure for 2026?

Speaker #2: And do you plan to adjust prices because of that? And another question, regarding the push ahead in Europe, what do you think of local content measures?

Speaker #2: Do you think these make sense? Maybe first Oli and then Ola. Well, we said that in 2026 sales will remain below 2025. This is our expectation.

Ola Källenius: I believe that we showed that our product campaign that will really have a bigger effect in the second half of 2026. We will be able to improve our situation, but in sum total, sales will remain below EUR 25. But you also said that on the prior year level, as regards the total sales expectation, we of course want to make sure that we can compensate elsewhere in the world to make up for that. Number two, price adjustments or price adaptations, you referred to that in the market. There is a gap between the list price and the transaction price. So we have done a few strategic price adaptations already earlier that year, but they don't have any effect on the transaction price of the vehicle on the market.

Speaker #2: I believe that we should time our product campaign so that it will really have a bigger effect in the second half of 2026. We will be able to improve our situation.

Speaker #2: But in some total, sales will remain below 2025. But you also said that on the prior-year level, as regards the total sales expectation, we, of course, want to make sure that we can compensate elsewhere in the world to make up for that.

Speaker #2: Number two, price adjustments or price adaptations—you referred to that in the market. There is a gap between the list price and the transaction price.

Speaker #2: So, we have done a few strategic price adaptations already earlier this year, but they don't have any effect on the transaction price of the vehicle on the market.

Speaker #2: Rather, they are one component in a plethora of components of what we do in order to optimize our cash flow, and our dealers are involved too.

Ola Källenius: Rather, they are one component in a plethora of components of what we do in order to optimize our cash flow, and our dealers are involved, too. We want to sell at attractive, but not overly attractive prices. European content, and everyone is waiting for a positioning of the European Commission in this field, which is expected to come at the end of the month. I'll try to give you a balanced answer. In addition to my job as CEO of Mercedes, I'm also the president of ACEA, and we are intensely discussing this issue among the manufacturers, but also with our suppliers.

Speaker #2: We want to sell attractive, but not overly attractive, prices. European content—and everyone is waiting for a positioning of the European Commission in this field.

Speaker #2: Which is expected to come at the end of the month. I'll try to give you a balanced answer. In addition to my job as CEO of Mercedes, I am also the president of ACIA.

Speaker #2: And we are intensely discussing this issue among the manufacturers, but also with our suppliers. Let me tell you this: we all agree on CO2.

Ola Källenius: Let me tell you this, we all, we all agree on CO2, and we can see some movement here, but the small print still requires a lot of improvement, and the industry, more or less, has closed ranks, both manufacturers and suppliers, the many thousands of suppliers. When we talk about European content, the situation is more complex because the profile of the companies is very, very different. German manufacturers are global entrepreneurs, especially premium manufacturers. Their business model has been built over the last 70+ years, and they sell goods in all directions. So we are also big exporters, also from other regions, the US being the best example in this case. Like another premium manufacturer, we are the biggest exporter from the US.

Speaker #2: And we can see some movements here, but the small print still requires a lot of improvement. And the industry, more or less, has closed ranks.

Speaker #2: Both manufacturers and suppliers—the thousands of suppliers. When we talk about European content, the situation is more complex because the profile of the companies is very, very different.

Speaker #2: German manufacturers are global entrepreneurs, especially premium manufacturers. Their business model has been built over the last 70-plus years, and they sell goods in all directions.

Speaker #2: So, we are also big exporters, also from other regions—the US being the best example. In this case, like another premium manufacturer, we are the biggest exporters from the US.

Speaker #2: If you have such a profile, of course, it is quite obvious and logical that you're in favor of open trade and open markets, and against protectionism.

Ola Källenius: If you have such a profile, of course, it is quite obvious and logical that you're in favor of open trade, open markets, and against protectionism. If you're a manufacturer that has a regional footprint, and you strike it lucky in one of the big economic regions of the world, it may be tempting to think, "Well, whatever other economies do out there, this is not my living, level playing field. Let us raise the bars a bit or the obstacles." I can follow that, I can relate to that, and I, I can understand this. So there is no one single exact position across the industry regarding this question. But I think everyone agrees that the supply networks, they are not supply chains, they are supply networks that have been built over decades, that have been perfectioned. They are the invisible hand of the market.

Speaker #2: If you're a manufacturer that has a regional footprint and you strike it lucky in one of the big economic regions of the world, it may be tempting to think, well, whatever other economies do out there, this is not my living level playing field.

Speaker #2: Let us raise the bar a bit, or the obstacles. I can follow that. I can relate to that. And I can understand this. So, there is no one single exact position across the industry regarding this question.

Speaker #2: But I think everyone agrees that the supply networks—they are not supply chains, they are supply networks—that have been built over decades, that have been perfected.

Speaker #2: They are the invisible hand of the market. And the high-tech vehicles, for example, the S-Class, really feature components from all five continents. I think that protectionism and its unintended consequences—fast-forward, we shouldn't change this drastically.

Ola Källenius: And the high tech vehicles, for example, the S-Class, really features components from all five continents. I think that protectionism and its unintended consequences, we shouldn't change this drastically, and we all have this common denominator across the industry. If you do that, and as a market player, I'm in favor of a level playing field. So whenever you do regulate, you should really use a very, very fine saw, not the chainsaw, and make sure that no unintended consequences will ensue, especially after concluding a free trade agreement with 1.4 billion there and several hundred million people there. Well, I expect, in this case, the most intense debate in the course of the year 2026.

Speaker #2: And we all have this common denominator across the industry. If you do that, and as a market player, I'm in favor of a level playing field.

Speaker #2: So whenever you do regulate, you should really use the very, very fine saw, not the chainsaw, and make sure that no unintended consequences will ensue.

Speaker #2: Especially after concluding a free trade agreement with 1.4 billion and several hundred million people there. Well, I expect, in this case, the most intense debate in the course of the year 2026.

Speaker #2: One more question from the room, and then we will go online. So, if you want to register for a question, then press nine and star.

[Journalist] (DPA): One more question from the room, and then we go online. So if you want to register for a question, then press nine and star. Mr. Wilhelm from DPA. One question with regard to the plant and cash commit. Did I get it right that this year you will increase the units from 200,000 units to 400,000 units, so double the units? This is the first question. Second question, if Hungary is the biggest production plant of Mercedes in Europe, I ask myself, is that only the beginning, maybe, for cost reasons?

Speaker #2: Mr. Wilhelm from DPA. One question with regard to the plant in Kashkamet. Did I get it right that this year you will increase the units from 200,000 units to 400,000 units?

Speaker #2: So, double the units? This is the first question. Second question: If Hungary is the biggest production plant of Mercedes in Europe, I ask myself, is that only the beginning, maybe for cost reasons?

Speaker #2: Of course, it would be quite natural to transfer even more capacities to that site. Why shouldn't you do that? This was the capacity potential that Harald showed in the slide.

Ola Källenius: Of course, it would be quite natural to transfer even more capacities to that site. Or why shouldn't you do that? This was the capacity potential that Harald showed in the slide, so it won't happen overnight, all of a sudden. This is the capacity potential. Having said that, this is a clear message also to the colleagues here in Germany. We, of course, stand behind Germany. We have seen robust two-digit EUR billion amounts being invested in factories, tools, machines. The accounting, Harald, of course, is not done on a nation level, but I think it's fair to say that more than 50% of this investment is spent for Germany. So we do a lot of upgrading here in the plants, here in Sindelfingen, for instance. We did a lot in Rastatt to prepare for the launch of the MMA.

Speaker #2: So, it won't happen overnight, all of a sudden. This is the capacity potential. Having said that, this is a clear message, also to the colleagues here in Germany.

Speaker #2: We, of course, stand behind Germany. We have seen robust, two-digit billion amounts being invested in factories, tools, machines. The accounting, Harald, of course, is not done on a nation level.

Speaker #2: But I think it's fair to say that more than 50% of this investment is spent for Germany. So we do a lot of upgrading here in the plants here in Sindelfingen.

Speaker #2: For instance, we did a lot in Rastatt to prepare for the launch of the MMA. So we did that last year. This is also very important.

Ola Källenius: So we did that last year. This is also very important. So considering that, our worldwide sales in Germany, compared to the rest of the world, is 12, 13, 14%, but investment is more than 50%, and more than 60% of the employees work here. So, I mean, this is a clear commitment to Germany. If this is no commitment, I don't know what kind of commitment I can give you, and you will hardly find any other company with such a commitment. Having said that, Germany must increase competitiveness. We have had many years where we compensated higher costs with intelligence.

Speaker #2: So, considering that, our worldwide sales in Germany compared to the rest of the world is 12%, 13%, 14%. But investment is more than 50%.

Speaker #2: And more than 60% of the employees work here. So, I mean, this is a clear commitment to Germany. This I can give you.

Speaker #2: And you will hardly find any other company with such a commitment. Having said that, Germany must increase competitiveness. We have had many years where we compensated higher costs with intelligence.

Speaker #2: But if everything happens at a time higher energy prices because of the horrible war in Ukraine, because of the higher labor costs compared to other economic regions, then the

Ola Källenius: But if everything happens at a time, higher energy prices because of the horrible war in Ukraine, because of the higher labor costs compared to other economic regions, then the slowness, then the cost level, et cetera, et cetera. Then you reach a point where competitiveness as such is put into question. This trend has to be turned around, because capital chooses the risk-oriented return. There's no preferred nation of capital. This is the reason why we in this union, together with many other industry sectors-

Speaker #1: Loneliness and the control level, et cetera, et cetera. Then you reach a point where competitiveness as such is put into question.

Speaker #1: This trend has to be turned around because capital chooses the risk . The risk oriented return . There's no preferred nation of capital .

Speaker #1: This is the reason why we in this union , together with many other industry sectors , we ask Brussels and Germany , please , let's increase the competitiveness .

[Company Representative] (Mercedes-Benz Group AG): ... We asked Brussels and Germany, please, let's increase the competitiveness, the competitiveness of Europe. That's the best protection for economic growth, labor, innovation, et cetera.

Speaker #1: The competitiveness of Europe . That's the best for economic growth . Labor innovation , etc. . Online . Now let's take an online question from AFP and Luis from Portugal .

Harald Wilhelm: So, let's get in the online.

[Company Representative] (Mercedes-Benz Group AG): Now, let's take an online question from AFP, and Lewis from Bloomberg.

Speaker #1: Wolf

Speaker #2: Good morning . Thank you for taking my questions . Just first of all , on Made in Europe , the Saudi are warned this week that such a strategy could invite countermeasures , protectionist measures from other markets to what extent do you share those fears and why ?

[Journalist] (AFP): Good morning. Thank you for taking my questions. Just first of all, on Made in Europe, the Federation warned this week that such a strategy could invite countermeasures, protectionist measures from other markets. To what extent do you share those fears, and why? And my second question would be, with the Cars return on sales next year, you guide 3 to this year; in fact, 2026, you guide 3 to 5%, I think. Could you please elaborate a little bit what kinds of factors might drag you down closer to three? What might push you up towards five? Thank you.

Speaker #2: And my second question would be for the car's return on sales next year . You guide three to this year . In fact , 2026 , you guide 3.25% .

Speaker #2: I think... Could you please elaborate a little bit on what kinds of factors might drag you down closer to three? And what might push you up towards five?

Speaker #2: Thank you .

Speaker #3: So I'm not 100% sure if you heard my German answer to almost the same question before , I'm not going to repeat most of that , but I can say this if you , as an economic actor , act against another economic region with protectionist measures , it would be naive to believe that that other economic actor just sits back and says , whatever .

Ola Källenius: So I'm not 100% sure if you heard my German answer to almost the same question before. I'm not gonna repeat most of that, but I can say this: If you, as an economic actor, acts against another economic region with protectionist measures, it would be naive to believe that that other economic actor just sits back and says, "Whatever." It's more likely that that other economic actor would devise a countermeasure. And the most prominent recent example of this is the EU anti-subsidy study on BEV vehicles, which I understand the reasoning behind it, and it was about level playing field, which I understand and I have understanding for, but the Chinese side, not obviously with the same measure, has already acted, and it affects businesses, European businesses in that market.

Speaker #3: It's more likely that that other economic actor would devise a countermeasure, and the most prominent recent example of this is the EU anti-subsidy study on BEV vehicles. I understand the reasoning behind it, and it was about a level playing field, which I understand, and I have understanding for.

Speaker #3: But the Chinese side, not obviously with the same measure, has already acted, and it affects businesses—European businesses in that market.

Speaker #3: That is why I say handle with care from the headline that might sound good in a campaign . Go European and I'm I'm a European loving citizen as you can find , we live in a global economic network .

Ola Källenius: That is why I say, handle with care, from the headline, that might sound good in a campaign, go European, and I'm as European loving citizen as you can find. We live in a global economic network, and certainly the auto industry is one of the most global ones. So when you devise policy on that, do it with precision, and not with rough measures.

Speaker #3: And certainly, the auto industry is one of the most global ones. So when you devise policy on that, do it with precision and not with rough measures.

Speaker #4: On your second question , and I think I explained the walk from 25 to 26 , I'm not going to repeat that . But I mean , if I think about your question in terms of what could either bring us closer to the three or the five within the the guidance corridor , and I would probably say some potential on commodities and maybe on , on FX , be it on the , on the romance side , could take us into a higher level .

Harald Wilhelm: On your second question, I think I explained the walk from 25 to 26, so I'm not going to repeat that. But, I mean, if I think about your question in terms of what could either bring us closer to the 3 or the 5 within the guidance corridor, and I would probably say some potential on commodities, I mean, maybe on FX, be it on the raw mat side, could take us into a higher level. What could take us, I mean, to a lower level, I mean, China is always, I think, unforeseeable in terms of the intensity of the competitive environment, that could be an element, I mean, which could bring us, I mean, further down.

Speaker #4: What could take us to a lower level ? I mean , China is always , I think , unforeseeable in terms of the intensity of the competitive environment .

Speaker #4: That could be an element which could bring us further down. Right now, I would rather say it's a calibrated approach which we take for 2026.

Harald Wilhelm: Right now, I would rather say it's a calibrated approach, which we take for 2026, thinking about the 3 to 5.

Speaker #4: Thinking about the 3 to 5. Zurück in den Raum, dann nochmal.

[Company Representative] (Mercedes-Benz Group AG): Back to the room here.

Speaker #1: So, back to the room here.

Speaker #5: Hi again, in English. Stephen Willmott from the Wall Street Journal on the US growth ambition. When do you expect to get to that 600?

Stephen Wilmot: Hi. Again, in English, it's Stephen Wilmott from the Wall Street Journal. On the US growth ambition, when do you expect to get to that, six hundred, sorry, 400,000 target? Is that, again, mid-term ambition? It wasn't totally clear whether that was the same time frame. And, what's the path towards that? Is it selling? Is it the localization of the GLC, which will make a big difference? Is it selling all of the local vehicles, or are you? It sounds like from your tariff guidance, you're also counting on more imported sedan, Sorry, selling more imported vehicles, too? It'd be just good to get some color on that, growth ambition. Thanks.

Speaker #5: Sorry , 400,000 . Target . Is that again middle mid-term ambition ? It wasn't totally clear whether that was the same time . And what's the path towards that .

Speaker #5: Is it selling? Is it the localization of the GLC which will make a big difference? Is it selling all of the local vehicles, or are you?

Speaker #5: It sounds like from your tariff guidance , you're also counting on more imported sedan . Sorry , selling more imported vehicles to just good to get some color on that growth ambition .

Speaker #5: Thanks .

Speaker #6: So on the on the 400 we stay consistent to mid-term . That's that's true . We finished last year roughly 300,000 units . And we believe we can grow that mid-term to 400,000 units .

Harald Wilhelm: So on the 400, we stay consistent to midterm. That's true. We finished last year roughly 200,000 units, and we believe we can grow that midterm to 400,000 units. If we look at our original past market shares in the market, having a comparable product portfolio to our competitors, I think it's a reasonable assumption to believe that we can grow and win back market share with the brand we have, with the brand new products we have, with the technology we have presented today, with the further increase in localization, and with the partnering up with global partners like Microsoft, Google, NVIDIA, et cetera, to get closer to the customer demands in the United States.

Speaker #6: If we look at our original past market shares in the market having a comparable product portfolio to our competitors , I think it's a reasonable assumption to believe that we can grow and win back market share with the brand we have , with the brand new products we have with the technology we have presented today , with a further increase in localization and with the partnering up with global partners like Microsoft , Google , Nvidia , etc.

Speaker #6: To get closer to the customer demands in the United States. So, these five elements are just pointed out. We believe they make us very, make us very confident that that's an ambition.

Harald Wilhelm: So, these five elements I just pointed out, we believe, make us very confident that that's an ambition, and it's a tough ambition, but that's an ambition, not unrealistic.

Speaker #6: And it's a tough ambition. But that's an ambition, not unrealistic. So

[Company Representative] (Mercedes-Benz Group AG): So this brings us to the end. Mr. Geisen, you showed a hand?

Speaker #4: Then we come langsam to some end.

Speaker #1: So this brings us to the end . Mr. Gaster , you showed a hand . Yes , I have one more question . With regard to the top end area .

[Journalist] (DPA): Yes, I have one more question with regard to the top end area. You've mentioned the year medium-term targets, 14 to 15%, or an increase to 15%... modest. You used to have very ambitious targets. You also had a share of 16%. I mean, can you explain why in this segment it will be so challenging in the years to come?

Speaker #1: You've mentioned the medium term targets 14 to 15% in , in or an increase to 15% . So this is really modest . You used to have very ambitious targets .

Speaker #1: You also had a share of 16%. I mean, can you explain why in this segment it will be so challenging in the years to come?

Speaker #7: I already gave you part of the answer on that. And that—

Harald Wilhelm: I already gave you part of the answer on that, in that we take the entry AMG, offer, that's the 35% offer. So we'll discontinue that. So it's a great volume element, but not a great earnings element. And if you take that out, and if you look at the other products that are coming, you will be looking at quite a substantial growth, so greater than 15% in the midterm, and then a share in the overall sales of, of 15% or greater. Now, if you look at what Matthias said, then some of the growth will happen in the core, in particular with the electric core product. So this element also will grow.

Speaker #4: I'm gay .

Speaker #7: We take the entry AMG offer . That's the 35% offer . So we'll discontinue that . So it's a great volume element , but not a great earnings element .

Speaker #7: And if you take that out, and if you look at the other products that are coming, you will be looking at quite a substantial growth.

Speaker #7: So, greater than 15% in the mid-term. And then a share in the overall sales of 15% or greater. Now, if you look at what Matthias said—

Speaker #3: On .

Speaker #7: Then some of the growth will happen in the core, and particularly with the electric core product. So this element also will grow.

Speaker #7: It might seem superfluous because you're saying , okay , well , you're coming from ten , 11 , you're already present in that segment .

Harald Wilhelm: It might seem superfluous because you're saying, "Okay, well, you're coming from 10, 11, you're already present, in that segment." Yes, we build up a great position. Yes, we're leading worldwide in that segment, but it is still a more balanced and ambitious journey in the next 2 to 3 years, in particular, with the entry AMG, that is not mathematically part of that.

Speaker #7: Yes , we build up a great position . Yes , we're leading worldwide in that segment . But it is still a more balanced and ambitious journey in the next 2 to 3 years .

Speaker #7: In particular , with the entry AMG that is not mathematically part of that . Thank you . Last question , Mr. Daimler . Well , do you believe that you'll be able to compensate for the tariff effect in the US by price increases , or is that something that's hopeless ?

[Journalist] (DPA): Thank you. Last question, Mr. Demle.

Harald Wilhelm: Well, do you believe that you'll be able to compensate for the tariff effect in the US by price increases, or is that something that's hopeless? We're not, we're not making this assumption. No. Okay, that was a short question and a short answer. So let us come to the end of this media Q&A, and I'm going to be switching to English.

Speaker #7: We're not—we're not making this assumption. No. Then.

Speaker #4: .

Speaker #7: Okay, that was a short question and a short answer. So, let us come to the end of this media Q&A, and I'm going to be switching to English.

Willem Spelten: ... Participation today, both here in person and, online via the live stream. We truly appreciate, all your questions today and your attendance. This concludes the event. It was wonderful to have all of you with us. See you next year in an even brighter future. Take care. Bye-bye.

Speaker #6: Today .

Speaker #4: Both here in person and online via the live streams. We truly appreciate all your questions today and your attendance. This concludes the event.

Speaker #4: It was wonderful to have all of you with us. See you next year, in an even brighter future. Take care.