Mercedes ‘Baby’ G-Wagon Will Be Worth the Wait, CEO Says

We're thrilled to be joined by Ola Kalenius, the Chief Executive Officer of Mercedes-Benz. It's a new age for mobility. We're here in Munich. How does this car, the CLA, the new concept, how does it answer the new demands that consumers are asking for in this new age of mobility? The CLA concept is in its technological offering revolutionary. Three figures for you. More than 750 kilometers range, 12 kilowatt hours per 100 kilometers. I'm not aware of any car in that class that has that level of efficiency. And equally important for our customers, 400 kilometers range charged in only 15 minutes. So it really takes the game to the next level in this class. And I want to talk a little bit about how the car looks and how that plays with the range. You know it's got this sort of stylized of Mercedes, a big grill, big face. How do you balance that aerodynamism with the need for range and the aesthetics that Mercedes wants to preserve? Mercedes has always been about the perfect blend between innovation and technology on the one hand, but this timeless elegance on the other hand, you know, the aspect of the desirability of Mercedes. We have really smart engineers that get this down to the lowest drag that you can possibly think of. But at the same time, it's absolutely beautiful. And on the inside, it's roomier than you think. I'm 6'4". I can sit comfortably in the back seat of this car. And when will you be sitting comfortably in the back of this car? When will you see this car on the road? We're looking at market launch sometime in the first half of 2025. And the combustion engine sort of equivalent prices at around 50,000. Will it be more or less than that? We're not announcing prices at this stage, but all I can say is on the technological front, we're taking a significant step up in this segment. And at the same time, it will be a Mercedes through and through. So look for something exciting. And with the CLA and BMW announcing as Neue Klasse, does this bring back the importance of the auto show, do you think, in your mind? I think the auto show importance never went away. During COVID, we'd learned to deal with digital formats for everything. But it's a physical product. It's a product. You need to kind of see it, touch it, feel it. And there you go. And in terms of pricing more broadly in the business, and we're seeing a softening economic picture right now globally, how is the pricing holding up for EVs and combustion engine cars from Mercedes more broadly? Our goal is value over volume. So we're not pushing volume. We're very, very careful about how we go to market, our go-to-market strategy. And as you can see from the results for the first six months of this year, that has been working quite well for us. And can you continue to ignore Tesla's price cuts, even on the higher end, which are more in competition with Mercedes' products? We're focused on value for the customer. I don't think the customer expects from a Mercedes a little bit of a rollercoaster ride, but something that you can depend on. So we will continue with the value over volume strategy. We see raw materials for EVs coming down. We see the supply chain kinks worked out. What does that look like in the future? Is that going to help you on margins, do you think, going forward? Do you think that is stabilized for the time being? We're working on deep sourcing, as far as the raw materials for electric mobility is concerned. Not just to make sure that we have sourcing stability, but also make sure that we have a more economic stability in terms of raw material pricing. And I think there is an opportunity there as EV, as EV, the EV sector scales, that we can find variable cost improvements in this area. And there's huge concern about the state of the Chinese economy. What is Mercedes' experience of the Chinese economy right now? Is it affecting demand? Well, all big economies at the moment are grappling with some challenges. We have high interest rates in, higher interest rates in the United States and also in Europe to deal with inflation. In China, they have their structural problems. After 30, 40 years of an economic wonder, they're reaching also, I guess, a level of maturity where you're dealing with structural issues as well. So I think we have to take a little bit of a cautious stance on that and see how things develop and not expect rapid growth as far as the economy is concerned in the short term. And this car show will also be marked by a lot of Chinese automakers bringing their cars to the market, introducing them maybe for the first time to many people. How do you view that in your home turf here in Germany? The auto industry is in transformation, I think almost a disruption. It's natural that new players are going to come in. And we respect both the established competition as well as new players that are trying their luck in the business. But that's not our focus. Our focus is on the Mercedes customer, to give that customer the perfect blend between technology and desirability. And that customer loves the G-Wagon. And I have to ask now about, is this a lowercase G? What can we expect from your announcement today? The G-Wagon is an icon. I mean, it's almost impossible to get one actually. It's sold out. But yes, tonight we are announcing for all the G fans out there, there will be a little G. So a son or daughter of the iconic big G. We have not announced timing yet. But if you wait for something good, it will be worth the wait. And we are looking a lot into the future. I want to just step back into the past, if I may ask you, what was the first car you owned? What did you learn how to drive on? My very first car was a VW Golf 1. So that's where my motoring started. But my first Mercedes, and I think that's even more important, was a C-Class in the early 90s. Alain Kalanias, thank you so much. Thank you.