EXCLUSIVE: Mercedes-Benz CEO speaks to CGTN Europe

CGTN Europe

Mercedes-Benz is flashing its hazard warning lights, announcing that it expects earnings to fall further this year after a slump of 30% in 2024.   The German giant is not alone, as auto manufacturers across Europe warn of rising energy and labor costs.   In a CGTN Europe exclusive interview, Juliet Mann spoke to Ola Kallenius - the CEO of Mercedes-Benz group.   #MercedesBenz #Mercedes #Merc #Cars #Auto

Transcript

00:00If we look at 2024, we saw a market that was quite challenged, especially in China towards

00:08the second half of the year. And in that environment, we have printed today very

00:13solid results, especially the free cash flow above nine billion euro is a very,

00:20very strong number considering the macro and market environment and also in our competitive set.

00:27But we're not complacent. We're going to continue to work on new technology,

00:32new products, but at the same time at our efficiency levels.

00:36But the demand just doesn't seem to be there for EVs, does it? I mean,

00:40what's it going to take for you to get the business to where you want it to be?

00:45The EV market around the world is heterogeneous. And in China, it has started kind of going from

00:52the bottom going up. And we have our strongest footprint on the top end and the higher segments,

00:59where still the electrified high-tech combustion engine is the choice customers are looking for,

01:04where we have a very, very strong market position. But we are gradually growing organically our EV

01:11footprint. And in Europe, in the United States as well, we're about to launch a whole host of

01:17EV vehicles here in the next two to three years. On top of that, class-leading plug-in hybrids.

01:23There are some bumps in the road, though, aren't there? I mean, tariffs are a pain. But isn't

01:27the big issue all around cost? I mean, you're competing with some of the big Chinese companies,

01:33for sure, when it comes to cost, when it comes to technology, when it comes to market share.

01:38It is true that the macro environment is difficult. In 2025, we take a cautious view on that.

01:45And there is a high level of competitive intensity. How do you approach that as Mercedes-Benz,

01:50the inventor of the automobile? It's through innovation and new product. And we have the

01:55biggest product offensive coming in the history, product and technology innovation offensive,

02:00in our history, in the next couple of years. But it's also about efficiency. We're doubling down

02:06on efficiency. And we're going through literally the whole company, the whole business system,

02:11and leaving no stone unturned. We want to save up to 5 billion euro compared to our original plan

02:19in 2027, and savings leading up in 2025 and 2026. So it's a situation where we're investing more

02:27than we've ever done before into new technology and products. But at the same time, we're

02:31emphasizing the efficiency efforts. You're also investing really big in China, aren't you? I mean,

02:37that's your largest single market. But you know, you look at the sales figures,

02:41those are being squeezed. I mean, what do you what's the future for the brand?

02:45In China, over the next years, we are embarking on a 14 billion renminbi investment program

02:51into new models, revamping our factories and getting ready for launch of these new models,

02:56both on the EV side, but also on the high tech side. In 2024, in very challenging market

03:04conditions, we actually were the number one luxury and premium brand in China. But it's not

03:10just about that. It is now going forward into the future with new and attractive products,

03:15specifically designed for the Chinese market. Let's move from China back to your home turf,

03:21to Germany, big election coming up this weekend. What does the car industry need to do or need to

03:28see the new government doing to fix the ailing economy? Because a lot of the pressures have

03:33been coming from the declining auto sector. I think we need to take the whole European view on

03:38this. Last year, the Commission asked Mario Draghi to do an inventory of European competitiveness.

03:46When I read that report, and I had a chance to speak to Mario Draghi himself, I left that meeting

03:51thinking to myself, let's do that. And the first competitive compass that has now been presented

03:59by the EU Commission goes in that direction.

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