Daimler Truck CEO Bullish on US Market

I want to get to that phrase specifically adjusting European production capacity. It is a little bit vague, Martin. So what does it actually mean? Does this mean job losses, factory closures or less output? What are the details? I would say it means it could mean less output as we had in the first quarter. We were expecting that the second-half would be a stronger half, but we haven’t seen the respective order intake yet. We are very flexible when it comes to our production side. So I don’t know factory closures at all and I see only less output of our factories, OK. So nothing dramatic, Martin, in, in terms of job losses just before we move along. So it’s a it’s a tempering at the edges. Yeah, it’s temporary on the edges and and as I said we we we come from an extremely high level. We had last year our absolute record year since more than 2025 years. We said this year we’ll have lower sales, but we have similar returns and similar profits and we have proven the first quarter that that is exactly and for your listeners potentially most important. We’re very bullish about North America, but we don’t see a fall back to to our record here in 2023. Well, that’s what we just wanted to elaborate Danny and I focused on this this morning. You say order intake in the US is still very healthy, but sales are down by 5%. So can you elaborate on that? This is not a slowdown, this is not a recession. This is to use the phrase, this is a Goldilocks scenario for you in the USA. It’s always difficult if you have a complex nature and just condense it to one single word. I mean we have like we are delivering at full speed from our factories and this plus -4 or 5% as we have seen this year in the US is more technical things. It depends east of us this year in March and not in April like last year. So that alone could already trigger this one to 2% down. What’s more encouraging is that we’re 30% more order intake in Q1 this year then we had a year ago and there was no reason to complain a year ago. So, so very healthy and good business, a good going through the second and third quarter within that health. What about prices, because we’ve seen other industries have to take down prices in order to still get that volume some to more success than others. Do you still have that pricing power that you once did? Yeah, we, we still have it. We didn’t overdo it when there was shortages. So I don’t see at the moment any necessity to reduce pricing. And and we can’t deny that we have inflation that means our materials, our wages went up significantly. So we need the higher prices. But you did say to us that you have lower raw material costs. So what naturally comes out next to that is, well, where are you seeing the most material decline in costs and and and the consequence therefore, can you say that inflation, that squeeze on inflation is firmly in the rear view mirror? No, the, the, the main push on inflation is at the moment the wages. Yeah. And that is not just our wages, it’s a wage situation at our suppliers. It’s logistics cost. So it’s everywhere. So raw material only plays one smaller role in the whole thing. So we are still in that in inflationary environment and therefore the pricing will stay where it is. Now when it when it comes to wages, Martin, because we were in this period post COVID where essentially companies had to hoard workers, they had to keep them because they were scared if they let them go then they wouldn’t be able to bring new workers on deck. Do you see a loosening in any way of the labor market or is it still extremely tight and as you say contributing to that inflationary environment and it’s still tied we have when we want to ramp up factories, I see it with suppliers, it’s still, it’s still not in a good position. Think about truck drivers, consistent shortages, depy despite fairly high wages. So I would say the labour market is still in a in A and is that globally Martin position what pardon is that globally as a global company it’s in every country it’s different, it’s different in Europe, definitely US is the most healthiest economy at the moment. Europe is so. So Indonesia, one large market we have is a really bad market at the moment. India is going well, Brazil is going better, Japan is so, so, So it’s a mixed bag at the moment. It’s no, no clear global trend. Let’s get you to your favorite. Let’s get you revved up. Let’s get you revved up, Martin and talk about EVI mean Elon Musk managed to convince the Chinese to help him this week and curious do you have full faith and conviction in the US and the European government to deliver the infrastructure to make EV trucks actually a reality over fantasy. I always said it has. It needs three things. Great products, cost parity and infrastructure. Great products are there. We have great products in North America, in Asia and in Europe. Cost parity depends we have to price CO2. Otherwise electric trucks will be always more expensive to drive and to run than diesel power trucks. Diesel is the most efficient way to store and transport energy and then comes to infrastructure and here I tell you I’m like a preacher and I tell the clock is ticking guys, you have to build up. We need to invest in the grid. We need green hydrogen. We we have we are doing steps forward. So I I still are costly as optimistic that 2030 is the time when the majority of the long distance traffic traffic should be going to say TV. Here I’m a little bit more optimistic to Europe in the, on the other side, you in the US have the ability to move extremely fast and therefore I’m as well optimistic for the, I said in 2013 we’ll see hydrogen power trucks and bath vehicles running long distance, but they will carry the Freightliner and the Mercedes brand. Well, there’s also China which I know you have a JV in China. Manas mentioned this that this week we saw Elon Musk come back from China with a big win from XI. How much of that we’ve been wondering is Elon Musk or an opening of China, Martin, what are you seeing in the region? Are you seeing a China that’s more engaged and willing to have and grow foreign born vehicle makers? I mean on the on the commercial vehicle side there is clearly the emergence locally in China of local players. China is commercial vehicle wise extreme difficult market. Already since four years we are there with a joint venture. So at the moment, China is rather on the minor side when it comes to trucking economy.