Journalist. And nobody else would consider myself a journalist. I began to take on the life of being an interviewer, even though i have a day job of running a private equity firm. How do you define leadership . What is it that makes somebody tick . Daimler benz is led, today, by ola kallenius, who is, among other things, the first nongerman to run the daimlerbenz. He is a swedish but spent his entire career there and is recognized for his intellect, hard drive, and ability to make things work in a large bureaucracy. Like all people running automobile companies, there have been challenges. Challenges from ridehailing companies, challenges from electric car companies. His biggest challenge, though, is trying to convince me to buy a new car. I have not bought a new car in 23 years. I like my mercedesbenz station wagon. 88,000 miles. It does well and i dont have to worry about anybody stealing it. He told me, actually maybe hes not such a good salesman, that if i hold onto it, it is actually worth a lot more as a vintage car. So, for the time being, im not going to buy a new car, but if i do buy a new car, he has convinced me one of his would be a good car to buy. Make sure everybody understands you are not a german, right . Ola no. I grew up in sweden, and i see that we have the swedish ambassador here today, as well. [applause] david i mean, i could see you being the ceo of volvo, maybe. [laughter] how did you get to be the ceo of a wellknown German Company . Has there ever been anybody not german who has been the head of daimler before . Ola no. And, of course, i was attracted by the three pointed star, but yes, im the first nongerman to take on the role. David so your predecessor, dieter zetsche, was very famous, with a very big, walruslike mustache. Did you feel you needed to have that to get the job . [laughter] did you consider growing a mustache . Ola well, up until this very moment, i hadnt considered it. [laughter] if it sells more cars, maybe i might. [laughter] david tell everybody how you actually came to be the head of daimler and mercedes. So you grew up in . Ola i grew up in sweden. I grew up in the south, in malmo, which is the third biggest city of sweden. But, through my university studies, i came in contact with the company and have been with the company for my whole career. David so you joined in 1993, after you graduated graduate school. Ola that is correct. David did you start out by saying i think i could be the first swede that is the head of daimler . Did you think it was a realistic chance . Ola i dont know if that was the very first thought that crossed my mind. I guess i just wanted to find my feet in the beginning. I was fascinated by the products. But this big company has given me a lot of opportunities. And, many years later, the greatest opportunity. David today, the company is in three parts. Can you describe what the three parts of daimler are . Ola we have, essentially, three businesses. The one business i think everybody in the world knows is the car business. With mercedesbenz cars and vans, the leading premium luxury brand in the world, and the first car. Our original founders, Gottlieb Daimler and karl benz, invented the car. Thats what everybody knows. But of course, we are the biggest truck and bus maker in the world as well, which is our second division. And our Third Division is the financial and Mobility Services that support industrial entities. David lets talk about the car division for a moment. Most people know it as mercedesbenz. But where did the name mercedes come from . Ola well, originally the company was the name of the founder. It was called daimler. He founded the company in 1886. And about 15 years later came a famous austrian industrialist. His name was jellinek. He was a racing enthusiast. He went to Gottlieb Daimler and his main chief engineer, Wilhelm Maybach at the time, and said make me a racing engine. I want to go to nice and compete in this race, and i want to win. So they made him an engine, they made him a car, he won the race, and the prerequisite was the car should be named after his daughter, mercedes. And the rest is history. So daimler changed the name of the product not the name of the company. He just loved that name, mercedes, and it became mercedes. David suppose her name had been josephine. Would we be calling this josephinebenz or . [laughter] ola it would have been a josephinebenz even if it had been brunhilda, maybe that well see. [laughter] but mercedesbenz works very well. Of course, the benz came later on as the copmanies merged in the 1920s. David how many cars a year does mercedesbenz sell . Ola now we are at about 2. 4 million, 2. 5 million. David roughly it is 80 million cars sold a year around the world. Its Something Like 17 million in the United States, 28 million in china, and europe is roughly the same as the United States. Ola exactly. David the biggest market for cars in the world is china. I think i said they sold 28 million or Something Like that last year. Is that where your biggest market is as well . Ola it is for our Passenger Car division, our biggest market, far and away. Last year, we sold about 700,000 cars in china. David those cars, are they manufactured in china . Ola most of them are manufactured in china. Some are manufactured in other places. We have operations in alabama in the u. S. We are one of the biggest industrial exporters to china. So we rest on local production but also a Global Production network. David you have lived in the United States as part of your career with daimler . Ola yes. Ive been twice in alabama. I actually started out my career after the training period in alabama, and i came back later on as ceo of the operation. David and you became a big alabama football fan . Ola i became a very big alabama football fan. So, on monday of next week, watching lsu play clemson is very difficult for me. [laughter] but, because we have been spoiled with so many championships, i guess we are going to have to stand down on this one. [laughter] david if i had a car manufactured in alabama and an identical one manufactured in stuttgart, and i asked you to go in it, could you tell the difference between those two cars . Ola no, i couldnt. Because those cars are actually the same. We switched, more than 25 years ago, away from made in germany, which is a seal of quality, to say made by mercedes. If it is made by mercedes anywhere in the world, it is the same standard. David you make a lot of cars in the u. S. , but you make some outside the u. S. Are tariffs something you care about very much . Ola tariffs are very important to us. Because, of course, we rely on Global Supply chains. So we rely on being able to build a car in one place and export around the world, like we are doing with suvs in alabama, and have goods going back and forth. So yes, of course, global open markets are very important to us. David so when youre in washington, for example, you ever talk to government officials and say, by the way, we do not like tariffs very much . Ola everywhere we go, we have the same message. If we want the cake to be bigger, open markets have been a very good way to make a bigger cake. So whether we are in washington, beijing, in brussels, or berlin, it is the same. David teslas market capitalization is 86 billion, and yours is like 59 billion. Is it embarrassing to have tesla with the big market cap . Ola maybe it should be encouragement. We want to create value for shareholders. And we will not sit back and say is that market cap enough . We will go for it. A david the cars you produce every year, 95 , i assume, are internal combustion carbon using car engines, right . Ola at this stage. Because, of course, the Combustion Engine has worked so well. Yes, that is true. But we are on the verge of a new era of mobility, so, gradually, that will change. David when will your electric cars really hit the market . Ola well, you could ask he say we were there before the market. We were the ones who put europe, to start with the first volume production electric car into the market, our urban brand smart. That was in 2007. We were there. Nobody else was there. Maybe we hesitated a little while, but now we are in a massive product offensive. This cars in the market now, we will bring it to the states beginning next year. In the next two to three years, there will be a whole family of cars in this socalled eq range. David youre trying to be Carbon Neutral by 2036 or Something Like that . Ola we have set an ambition that we call ambition 2039. What does that mean . The key was we launched this last year to say that, in 20 years time, we want to provide a whole new car fleet, Carbon Neutral. Technology agnostic but Carbon Neutral. But that is where the 2039 comes from. And because that seems far away for many people, even though that is a massive industrial change for the business, we have made an interim target by 2030 to have at least 50 of that fleet either fully battery electric or plugin hybrids. David with internal Combustion Engines, there is always a fight about what the miles per gallon standard should be in terms of what the governments require cars to do. In this country, there has been a debate there were certain obama standards, trump has different standards, theres california standards. What is your position on what the mile per gallon standard should be . Ola with the ambition 2039 that we presented last year, we have made a mental switch, and a very clear decision that our ambition is to provide co2 neutral mobility. We know it is not easy and we know there are a lot of challenges on the way there. We are on a journey. And that is a worldwide journey. So almost regardless of which standard you have in different markets, the toughest one right now is in europe. We feel that we will meet every one of those standards. And that is why that is almost, now, a secondary debate to us. And we will, of course, apply the same strategy across the world. David tesla has made a big in the electric car business. And teslas market cap is now 86 billion. Yours is like 59 billion. Is it embarrassing to you to have tesla have this big market cap . And they not be just to you. General motors and ford together, their market cap is not the same, not as high as tesla. So why are the other big Car Manufacturers kind of being left behind by tesla . Ola maybe it should be an encouragement. Of course, it is the job of every company to create value, and we want to create value for our shareholders. And we are not going to sit back and just say is that market cap enough . We will go for it. But there is a lot of uncertainties. The whole business is in transformation. Theres a lot of investment coming with this, uncertain markets, pressure on costs and margins. So i understand that there is a certain nervousness in the market. But if another startup that is going for the new thing can generate those kinds of market caps, then maybe there is potential for us. David so if i had to buy stock today, should i buy stocks in tesla or in daimler . Which one will go up . Ola i dont think youll ever have me recommend stocks of competitors. [laughter] and i am a true believer in the company that i am working for, so go with us. [laughter] but, of course, read the fine print. This is an unsolicited piece of advice. [laughter] and we have a lot of disclaimers and Financial Information you need to read before you make a decision. David what is the biggest challenge daimler faces today . Is it tesla . Is it u. S. Regulations . Is it competition from other companies . What is your biggest challenge . Ola there are so many. It is, of course, juggling a lot of balls at the same time. But i would say the overriding transformation, almost disruption, of the auto industry, is going co2free. It is a technological challenge. It is, of course, an industrial footprint challenge. And come in the many years we do this, it is also a financial challenge. To balance that out, i would say, is the biggest one. David who is your biggest competitor . Ola we have the traditional germans. For some reason, in southern germany, you have four brands, us and three others, that like to push each other. But you have, sometimes, new players, like the one from california and others. We watch, carefully, what is going on in the Competitive Landscape but try to make sure that our decision as a brand that stands for the promise of the future, that we are always in the lead in this competition. David i have this car i got in 1997. I am still driving it. What do you think the residual value of that might be . [laughter] ola that is what we call a youngtimer. It is a youngtimer. But it is on the verge of becoming an oldtimer. A david so what is the best new feature you are working on that will excite people in a year or two or something . Ola if i told you that, we would have to do the men in black thing. [laughter] so we have some spectacular things, obviously, but you keep your cards close to the chest. And then, when you have a big reveal, you go tada, here it is. David what car do you drive . Ola i drive the s class. David and you test drive all the models you guys are making . Ola it is one of the privileges of the job. If you like cars and you like engineering, you have a very big sandbox you can play in. And we test our cars all the time. On a regular basis, we drive all the prototypes of the things that are in the pipeline. David i know that new car is a very appealing to some people, because when you get in them, they smell new. [laughter] do you try to do something that makes the car smell new . Is that part of the appeal . And are there some places where the smell of a new car is not appealing . Ola it is part of the appeal. In traditional markets, like europe and the u. S. , yes, you love that. It is, of course, the leather that you mainly smell. But the new car smell, it feels fresh, like buying a new handbag or something. One country is different. It is china. They want to have a neutral. They want to have the car neutral, not smelling like anything. So there, we exit go out of our way to engineer it such that, when you step in, you just have a neutral space. David when somebody goes to buy a car, they go in and say, i want a car with this color, this thing, do you have those cars made up in advance . Or do people get them made specifically for their tastes these days . Ola it is different market to market. Our experience here in the u. S. Is, most times, when a customer wants to buy a car, after they have done the research and done all of these things and they actually get to the dealer, they want to drive home. You have to have the car finished and specd there. But if you want a tailormade suit, that is not a problem, and thats often in germany. The tailormade suit is available as well. David how much longer does it take to get that . Ola it depends on the model and the demand, but i would say at lease three months it would take to get that. David what is the most popular color you make for your cars . Ola well, in formula one, we race with the silver arrows, and silver has always been the color of mercedes. It is silver. David what are the most exotic options you have that are not part of the standard package . Ola well, of course, never estimate the creativity and ingenuity of the engineers. Once we make something standard, we come up with something new. One fun feature on the suvs that we Just Launched last year is what we call an electronic chassis system that can actually individually regulate the height of each wheel instantly. And a camera reads the road in front of you, so that, when it sees a bump, it adjusts before you hit it. It is like being on a flying carpet. That is one of those things. David ok, well. All right, i will take a look at that. [laughter] why should somebody buy a used car . You have all these new cars out there, is buying a used car a good idea . Ola it is if you buy a certified preowned from mercedes. [laughter] they are made with good quality, so they will last forever and a day. And, as i said, it is an aspirational brand for many. Especially in the german market. The first mercedes for many is a used mercedes, because you get into the price bracket where maybe you can do it. David suppose somebody is aspirational and they say, i want to say i have a mercedes, but i dont actually have that much money. What is the cheapest price you can pay to get a mercedes . Ola around 30,000. David how much . Ola around 30,000. David 30,000. So some dealers here will say they will sell a mercedes for 30,000, right . Ola a very barebones entry model. David ok, does it have a Steering Wheel and everything . [laughter] ola yeah. It will move from a to b. And because it is mercedes, it will move from a to b in style. David lets say i am not cost constrained and i want to impress my friends with the best mercedes i can possibly get with every option, every feature. What would that cost . 35,000 . [laughter] ola in that case, youve got to go for it. And, of course, the flagship of our range is the s class of the upper end. If you want to be a little more ostentatious, you can do the mybach special s class, and then we are talking 250,000. David how fast is that car go . Ola the concord probably go about 300 kilometers an hour, but we put a restrictor in it, so it will not go faster than 250. It is enough. David ok. So if i said i want a nice, germanmade card, even if it is made in alabama or somewhere else, south carolina, wherever it might be, but i dont want to buy a mercedes, because i want to try something else, what should that be . Should i buy a porsche or a bmw . Ola is walking an option . [laughter] [applause] david so if you are giving advice to somebody that wants to buy a car today, what would you give the advice to them about how to negotiate the best price and make sure they are getting the deal that they want and the car that they want . Ola as i said before, dont buy the price, buy the product. And look at the product features. So i am slightly biased here, but if you think about safety, quality, exciting technology, efficient powertrains, and so on, think about that. Whether it is 1000 up or down, in the end, it matters less. And, perhaps, in terms of total ownership, buying a more expensive car, in the end, with residual value, might be the better buy. David and residual value, does that hold up better for mercedes than other cars . Ola pretty good. The secondhand market for mercedes is very good. David i have this car i got in 1997. I am still driving it. What do you think the residual value might be of that . [laughter] ola here is a little known fact. If you had gone back to you said 1997 . David 1997. It is 23 years old. Ola that is what we call a youngtimer. It is a youngtimer, but it is on the verge of becoming an oldtimer. If you had invested your money in the right classic mercedes cars, sls and so on, and you look at the index of that over the last 25 years, it beats the s p 500 and most other Asset Classes that you could have picked. So my advice now would be hold onto that one, because it will come into its own, and, like a bordeaux wine, it will then get better over age. David now i will hold onto it. [laughter] you become a ceo when you were only 50 years old. You are only 50 now, right . Ola yes. David very young by my standards, practically a teenager. How long can you do this job . There is no age limit, so you could do this for 15 years or 20 years. Your predecessors did it for about a dozen years or so. Ola im not thinking about that so much right now. Im thinking about what i do today and tomorrow and navigating through the transformation. So it is not on my mind, by now it is going to be a very exciting journey here, as the whole company is in transformation over the next few years. David lets suppose somebody is in college now. They are saying i want to join a nice industry. Why should somebody want to join the Automobile Industry . Ola well, since i just came from the ces in las vegas, which stands for this is what happens tomorrow, at the electronic show, if you go to that now compared to 10 years ago, even the Tech Companies use cars to demonstrate their future technologies. So i dont know if there is a more exciting business than the auto industry. And we will always want to go from a to b or transfer goods from a to b, and now we have more technological tools. This is an industry in motion, in transformation, and what is more exciting than that . A announcer the following is a paid program. The opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. Announcer this program is a paid presentation and is brought to you by dr. Hos circulation promoter. 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