Good morning, everybody. After 2 years of virtual only, I'm very happy to welcome you personally in the Carl Benz Arena in Stuttgart, as well as obviously also virtually via telephone, via the Internet. My name is Steffen Hoffmann. I'm heading Treasury and Investor Relations.
Thanks, Steffen, good morning from my side as well. Great to have you guys. It's amazing to finally have people in the room again, even though it's just a small crowd, and welcome also to everyone joining us online. My name is Tobias Just. I'm Head of Corporate Communications. Yeah. It's the third time that we're presenting our annual results jointly to the investor analyst community and to the media community, which is great. In total, presentations today will last about 1 hour. As always, you can follow us with simultaneous translation. We offer German into Chinese. If you are on site and you wanna switch between translations, just a quick reminder, you will find German on channel one and you will find English on channel two.
Of course, our executives, after their presentations, will be available for you, for Q&As. There will be two consecutive Q&A sessions, the first one for analysts and investors, and then obviously followed, for the media representatives.
Yes. Both sessions will, as always, be featured on our corporate website. The annual results conference ends after the Q&A sessions, which will be approximately at 12:30. With that, I would say it's time to welcome our two main speakers on stage today, which is our CEO, Ola Källenius, and our CFO, Harald Wilhelm, please. Before we would start the presentation, I would kindly ask you to give us a minute for some media pictures, and then we can get going. Good. Then we do kindly ask you to take your... Yes. Thank you. Okay. Ola, stage is yours.
Good morning, everybody, welcome. I liked the line of the video, sign of new times. It fits quite well to Mercedes-Benz. We're a 137-year-old company, it's actually been our first year as a standalone Mercedes-Benz Group focusing on passenger cars and vans. What we're going to present to you today with the 2022 results demonstrated that we have resilience in a challenging environment. Our product offensive is successfully being rolled out across the world, and we are step-by-step implementing our strategy, moving into a new world for automotive, which is electric and digitalized. I would like to start by thanking the Mercedes team for their passion and relentless effort in 2022, navigating through this year, and making it very successful.
If you remember when we met 1 year ago and we talked about what are the priorities for 2022 inside the framework of our strategy, we have written down these five things that we wanted to focus on in the year of 2022. I just wanted to very briefly recap what did we do and how did we do against these priorities. We said we're now gonna start scaling electric vehicles, and indeed, our battery electric vehicle sales grew by just shy of 70%. We wanted to accelerate our efforts in car software. Many of you know that next week, on the 22nd of February, we will have a strategy update where we will lift the veil on the Mercedes-Benz Operating System and show you more details of what's going on there.
2022 has really been a year of laying the foundation for that. Also, in the area of automated driving, actually launching into the market the first product ever with Level 3 automated driving capability. Stay tuned for more news on the software side next week. We wanted to grow our luxury business. Our To p-End vehicle sales grew by 8%, so another strong year in that upper end of our portfolio, where we are the market leader. The last 2 or 3 years have been defined by supply constraints, mainly on the semiconductor side, and it's fair to say that 2022 was another one of those years.
We took a lot of steps to go into deeper sourcing, creating long-term contracts directly with the chip suppliers, not just on the semiconductor side, but also preparing ourselves for deeper sourcing for battery materials. As we move into 2023, we will see that those efforts are starting to bear fruit. Last but not least, you cannot produce robust financial results like we're presenting today unless you keep an atmosphere of efficiency in the company, focus relentlessly on cost, and be very, very, very mindful about every euro or cent that you spend on new products and technologies. 2022, a strong year in a challenging environment.
If we look at the numbers, the EBIT grew to just above EUR 20 billion and with a healthy cash flow, free cash flow of EUR 8 billion leading to a net industrial liquidity sitting at EUR 26.6 billion. If I dig a little bit deeper into Mercedes-Benz cars, what was the year all about? I use the word resilience, and I think that is going to stay with us. The last 3 years with COVID, with semiconductor shortages, other supply constraints, an energy crisis in Europe, it's something that has made us even more vigilant with regard to the macro environment. We need to keep this vigilance alive to make sure that we navigate through these times in a financially robust way.
The profitability has been lifted to a new level for this company, and Harald is gonna go into more details around that. As a first glimpse, in an environment where raw materials and there were inflationary pressures, we were able to, in this case, on the revenue side, on the price side, outweigh that and have a net positive position. We launched new products, the new GLC. In fact, the GLC is actually in our model portfolio, the best-selling car. We launched that into the market last year, and we'll grow that around the world this year.
We launched the first EQE SUV out of our operations in Alabama, and we presented to the world the smaller sibling of that vehicle, the EQE SUV, that has now started production and will go into the market in the first half of this year. On the technology side, many of you will remember that we did a drive with a research vehicle that we called EQXX at the beginning of 2022 to see if we could drive 1,000 kilometers on one battery charge. Was that just a science project for the engineers to demonstrate what is possible? No, it's much, much more than that. It is a foundation for technologies for the next generation eDrive train at Mercedes.
The architectures that are about to come, at the end of 2024, 2025 and 2026, they will already carry a significant part of the technologies that you saw in this EQXX, that will take efficiency to a new level. Efficiency is really the new currency when it comes to electric vehicles and the shift into a decarbonized future. As I mentioned, both on the S-Class and the EQS, we launched Level 3, and we also got as the first manufacturer, the ability to put that into the market in United States. We're the first state, Nevada, and we're looking at more states beyond that. It was also an important year for our operations. In this transition, going into EVs, which is a transition over many, many years.
It will be with us through this whole decade and into the next decade. If you're an established manufacturer, you have to rebuild your production footprint and your operations to match this new world. We have now created a target picture for every one of our plants around the world, both on the vehicle assembly side as well as on the powertrain side, how this transition is going to look like and laid the foundation for that. If you look at the volume side, yes, we grew by 5% in 2022, but over proportionally so at the Top-E nd of our pyramid, what we call Top-End vehicles, which grew by 8%.
On the battery electric vehicle side, just shy of 70%, and the plug-in hybrids stayed at a high level, at the same high level approximately as in 2021. If I switch gears and take a look at our premium van business. The van business, even though much of the focus is in the public domain towards cars, we have this jewel in our portfolio with a very strong and healthy premium van business. They had a year that can be very much compared to what happened on the passenger car side.
Grappling with the same challenges, largely, as was the case on passenger cars, the van team was able to also produce a very solid financial result and a very solid margin that was double-digit in the year of 2022. They also rounded off their portfolio and really have the large vans, the mid-size vans and the smaller vans. Many of the fleet customers, they also buy and want to have the whole portfolio available. The launch of the products for the van side on the, on the entry side also rounds off that picture, including the EQT. If you're a person that likes to go camping, you can now also go camping in an electric way in the entry segment.
I think, after 2.5 Years of COVID, a lot of people want to feel this freedom. That segment, which we are very strong in, is something that we think will grow. Maybe an even bigger decision on the operational side in vans as far as the production, footprint, the production network is concerned, is the decision that we made at the end of last year.
This is preparing for the next generation architecture that we call VAN.EA, an all-electric dedicated architecture for our large and midsize vans in the middle of the decade that we will rearrange our production network and with the construction of a new plant in Poland, move a significant part of the production to that new facility, which enables us to create more flexibility, but also, as a whole, lower the average production cost in our van division. The focus on going electric is very much as true for the van business as it is for passenger cars. The sales of vans grew even faster than on cars, +8%. On the battery electric vehicles, small growth in 2022, but it's because we're in model changeover.
The new generation of the electric Sprinter, kind of the 2.0 of that family, will be launched later this year. We're looking at beyond 2023, so 2024, 2025, we will see significant growth on the electric side in our van business. If we look at CO2, this is just the European number that we're looking at here, indeed, last year we kind of overachieved what we had originally thought in terms of a % XEV for Europe. This is, of course, without the first decimal after the comma here. We were a little bit north of 115 last year, we're a little bit south of 115 this year, it's also because of the growth of the battery electric vehicles.
We have now really gone global with our battery electric offensive in other markets as well. The 115, considering that, is a very solid number and significantly below our target. Next year, in 2023, when we look at this next year, you will see that number drop significantly. If you want to compare with other passenger car-only manufacturers, if you take out the van piece of the 115, so vans that have been registered for private use, the number would be around 106, if you want to compare with pure passenger car players. That gives you a short summary of what's gone on on the Mercedes car side and on the van side.
With that, I would like to hand over to Harald to take a closer look at the financials. Harald.
Thank you very much, Ola, and hello, everybody. Let's have a look, I mean, at the car financials a bit more in detail. What is, I mean, the point? I would say +5%, +15%, +30%. What I mean by it, +5% on sales, I mean, we heard it, the growth very much in the Top-End and in the core with Maybach, with EQS, with the C-Class, but also the GLC. If you then look at revenues +15%, it means obviously that, next to the mix, you have a significant price improvement. Looking at the EBIT side, I mean, +28%, what does that mean? I mean, performance at work, I would say.
Cash flow improved, I mean, to a bit more than EUR 11 billion in 2022. Let's have a look a bit more in detail, I mean, how did we get to the 14.6% return on sales adjusted, I mean, on the car side, in 2022. Well, the most important piece on this chart, I would say, is this bucket, volume structure and net pricing, which increased by not less than EUR 8.3 billion in the year. The majority of that growth clearly comes from net pricing, and that includes gross list price increases. That includes, I mean, escalation updates and a further improvement on discounts. The slight increase in the, in the volume, is at about, I mean, the same level as, I mean, the benefit from the mix.
The used car business was roughly stable, but very healthy contribution, I mean, all in all. Slight tailwind from the FX as well. Let's have a look on the industrial side, where obviously we had to face, I mean, significant step-up in raw material costs on steel at very elevated level. Yes, it came down in the meantime, but until it comes through the contracts, it takes a little while. As well as increases in aluminum and obviously in lithium as a share of EV vehicles, I mean, goes up. We further had to face, I mean, one-time commodity charges and made deliberate payments, I mean, to suppliers for semi-related claims. The inflation cost as well as, I mean, supply chain cost for inflation.
Take, for example, the inflation compensation bonus in Germany, as well as production interruption cost, I mean, further added to the bill. The stop-and-go and the logistic cost, I mean, in 2022 was a heavy burden. You can see in particular, I mean, in the Q4, we did some deliberate payments with regard to suppliers, as well as we had to accrue for the employee-related inflation bonus in Germany. That explains why the Q4 ended, I mean, with 13.4%, which is still, I think, at a very healthy level.
Overall, I think, I mean, the message is in 2022, we were able to offset, I mean, the significant charges, I mean, from raw mats and inflation and semi by pricing, and that's what we call the net-net pricing to be positive in 2022. Selling expenses. Well, a bit of higher marketing expenses, a bit of volume-related, I mean, incentives. And now the agent remuneration from the switchover of the Model D in 2022 was Austria and New Zealand and Australia is in the selling expenses. Whereas, I mean, the benefit, I mean, sits in the bucket, in the pricing bucket on the left-hand side of the chart.
You can see also a bit of an increase on the R&D side as we invest into the technologies and in particular into the Mercedes-Benz Operating System. On the others, you find a bit of adjustment from the discounting of provisioning. On the adjustment side here, well, worthwhile to note, obviously, the charges which we booked in Q1 related to Russia for close to EUR 700 million, as well as the M&A benefits, the gains from our restructuring of the Grand Prix activities, as well as the divestment of some of the own retail outlets. Overall, I mean the booked EBIT reached EUR 16 billion and return on sales of 14.6%. If we now look on the indicators of change, this is our pattern.
I mean, how we follow what we told you we will do between 2019 actuals and the mid of the decade. Where are we? Well, if we look at the ASP, slightly increased by 43% since 2019. Another 9% in 2021. The ASP therefore stands now at EUR 73,000 in 2022, obviously driven by a strong mix and pricing. Looking on the active workforce side, you see a -5%. Well, I mean, if you bear in mind that a very good part of the workforce is on the blue-collar, where we did not reduce, it tells you that mean the reduction on the indirect side is even higher than these 5%. Fixed cost, -13%.
I mean, some of you might dig out the chart from previous year and will find - 16%. Yes, we have inflation here, which we have to fight and offset. It just demonstrates, I mean, that this level of reduction is not a walk in the park, but definitely we stick to our objectives of - 20% until the mid of the decade. On the R&D side, I mean, you see some addition to it. I mean, again, as we invest into our future, into technologies. On the PPE side, on the investment side, the CapEx side, you see a very strong break as we making use of our assets, I mean, for longer, reuse, I mean, the assets.
Now we're entering a phase where we have to put, I mean, some investment into extension of our footprint in Eastern Europe, I mean, in Kecskemét, but also into the renewal of our paint shops, just to name an example. Overall, we are definitely, I mean, committed to these targets, which we announced for the mid of the decade. If we look at, I mean, the cash flow evolution in 2022, how did we get to EUR 11 billion cash flow? In terms of the conversion rate, that sits at 0.7, which is slightly below our guidance. Why? What's the key reason for that? I mean, you see a charge on working capital, on net working capital of approximately EUR 3 billion.
The key driver in here is an elevated level of inventories. Why that? Still a lot of vehicles would have been in the outbound, i.e., on the way into the markets by the end of the year. We've been talking also about some S-Class certification issues, which have been holding back, I mean, the flow of the vehicles, I mean, into the market. Furthermore, the mix in the inventory is significantly heavier. Obviously, if we sell more at the Top-End, you need to get them through the chain. On the other side, we could reduce on the unfinished significantly towards, I mean, the year-end. The S called inbound also helped by the trade payables. That explains, I think, for the working capital.
On the M&A side of things, you have the, our investment into ACC in 2022. On the other side, the cash proceeds from the own retail outlet sales. The investments are growing in line with our predictions. As I, as I mentioned and explained before, the other line is basically the reversal of the P&L impacts compared to the cash on the Grand Prix restructuring, as well as the retail outlets, as well as the reversal of the at equity result versus the divi from BBAC, as well as the diesel-related payments in 2022. Adjustments are for legal restructuring, legal and restructuring M&A transactions, as I explained already. With this, I would turn, I mean, to the van side.
Well done to the van team here. I would say, I was saying, I mean, 5%, 15%, 30% before. Here I would even say, 8%, 17%, s- or close to 60%. Basically, I think it's a similar thing. Sales up 8%. Revenues, even more, 17% up. Volume mix pricing at work, I think a very good, I mean, underlying performance with EBIT at EUR 1.9 billion. Turning that also into cash with a conversion rate of more than one. I think really well done. How did it work? I mean, I will accelerate maybe a bit on this.
How did we get to 11.2% on the van side? Again, here you see the volume structure and pricing bucket, I mean, significantly positive. Here, the volume helped also a very good mix from Sprinter, Vito, and the V-Class next to the pricing. That also could offset the industrial challenges and charges we had to face. Basically, I would say the same things I was talking about, I mean, before on the car side. As well as, I mean, the explanation here on the selling, same explanation. The switchover also on the van side into the direct sales model. With this, I would go to the cash flow of the van, of the vans. Well, I think a pretty clean, good picture.
Well managed also in terms of, I mean, the production and the inventory. You see it just, I mean, a moderate charge on working capital here. The investment side is still, I mean, significantly lower than the depreciation side. Here, I mean, we need to anticipate that this will change moving forward, as we now will invest even more into the VAN.EA platform and the extension of our footprint in Eastern Europe as it has been announced. In the other bucket, I mean, you have also then the reversal of the FBAC result. The adjustments are on legal proceedings related to diesel. Turning to mobility. Overall, I think, I mean, a high level of profitability, 17%, despite a challenging environment.
The net credit losses or the actual credit losses remain at a very low level that has been supported by high quality in the portfolio and also strong used car prices, I mean, in 2022. Overall, I mean, the weakening of the macro environment caused us to update, namely increase, I mean, the cost of credit risk. The higher interest rates, I mean, definitely, and we try to pass them, I mean, further on, I mean, to the customers. That comes along with some time lag and also, I mean, a bit of a step up in the competition in the field that put pressure on the interest margins. On the positive side, the fleet management business had a very good contribution in 2022.
In 2022, we also completed the as called phase two, namely, further transfer of the truck business or the truck financing business has been completed. Now we can say that Mercedes-Benz Mobility is fully dedicated to support the cars and vans in the transformation journey. How do the numbers look like, I mean, for mobility? The new business, I mean, decreased by roughly 9%, lower penetration rate, intensified competition. Also in the previous year number, you still have, I mean, the truck business inside. The portfolio overall, I mean, remained stable at EUR 132 billion. On the EBIT adjusted, I mean, we are at 16.8%. Let me explain how we got to that number.
Well, in essence, I think, I mean, that is a healthy number, 16.8%. As I said, I mean, before we had to cater and accrue for higher credit risk provisions due to the macro changes. Again, not to actual losses incurred, but to, due to the macro environment, a bit of a lower volume and the pressure on the interest margin I just explained before. On the other side, FX and the G&A helped a bit to improve. What's the copy then at the group level? Well, Ola, you mentioned, I mean, EUR 20 billion already. I explained, I mean, the division side of things. What, what's left, it's the reconciliation bucket here.
That is chiefly the contribution from the colleagues from Daimler Truck, which is included here at a net after PPA of EUR 226 million. On the adjustments, we find again the restructuring, I mean, related to Russia, as well as the M&As I mentioned already several times during the presentation. That leaves us, I mean, with a group EBIT on the booked side, also above EUR 20 billion at EUR 20.5 billion. Group cash flow. The cash flows of the divisions before tax and interest, I explained already before. What happens else on the group level, it's basically the cash taxes, which were at EUR 4.1 billion in 2022.
I think we alluded to that they would go up significantly from 2021. Obviously, with higher level of earnings, as well as the tax loss carry forwards being gone, that comes up. With this, I think we also honor to be a good corporate citizen. Adjustments again, same thing from the legal restructuring, the M&As, and the like. On the net liquidity in the walk from 2021, where we started the year to the 26.6 end of the year. Obviously, the key thing, the cash flow of more than EUR 8 we had on the chart before. The divi, which we paid to shareholders of EUR 5.3. For the year 2021.
Also, worthwhile to mention, I think, contribution from Mercedes-Benz Mobility, namely capital returns as the portfolio is running at a lower level, which was healthy, which sits in the 2.9 bucket on the right-hand side of the chart. What is the proposal on the dividend side? With the EBIT reported of more than EUR 20 billion, that translates after tax into net profit of EUR 14.8 or EUR 13.55 for the earnings per share. We suggest a dividend of EUR 5.20 to the AGM. That is slightly below, I mean, a payout ratio of 40%. That is still, I mean, a step up year-over-year of I think, what is it? 4% or so compared to EUR 5 in last year.
If you really wanna make it like for like, bear in mind that the EUR 5 of last year had EUR 0.70 for the truck inside. It means nothing else than a step up in the divi proposal of 21%. Divi not enough. Well, today is a day where optionality turns into reality or last night. Some of you know what I mean, having made a reference to that, I mean, a couple of times throughout 2022. The dividend in and itself and the proposal we just went through before I think it demonstrates our commitment and dedication to shareholder returns. Today with this announcement of the EUR 4 billion share buyback program, over 2 years, we definitely, I think, I mean, go a step beyond that.
What was very important to us and remains very important, the strategic objectives of the company definitely have priority, the definition of them and the execution. We feel and the board feels that we are well on track in terms of, I mean, the strategy and the strategy execution, and therefore next to the strong operational performance, which we could see now over some period of time and the cash generation, we think that we can optimize them in our capital structure. By doing that, we believe we can create value for our shareholders and return capital to our shareholders by launching that share buyback of up to EUR 4 billion over max 2 years.
The program is scheduled to start in March, this, the year, and we intend to complete it no later than 24 months from March 2023 starting. Another important thing, we rather consider this share buyback, I mean, to be funded by the cash flows to be generated after dividend in 2023 and in 2024, rather than grabbing, I mean, into the cash balance sheet and just, I mean, returning. It is a sign of confidence in our strategy execution, but also a sign of confidence in our capability to command a cash generation moving forward. Another important point, I would say is, you could see with the announcement yesterday that two key shareholders, I mean, BAIC and Geely, each individually agreed to keep their shareholding respectively below 10%.
There's also demonstration of a very strong and good relationship with our shareholders at that end. Now, let me turn to the outlook for 2023. First, I mean, there's an assumption chart which is pretty long and in detail, and I would really like to invite you to read it carefully, as I think we're in an environment of lots of uncertainties and volatilities, when it comes, I mean, to geo, to macro, to trade, to politics, COVID-19 in China, semi or supply chain related, I mean, issues, energy cost, commodity prices, inflation and interest. Probably can read it for 15 minutes, but I'm not doing that, as we want to talk about, I mean, what we have in mind for 2023.
Maybe a word on the supply chain side. Here we see that the bottlenecks are easing. However, some individual and still important and material topics remain causing supply constraints. On the demand side, first, I mean, let me refer to the situation in Europe. Here we see the incoming orders being more sluggish. However, I mean, the order bank in Europe, I mean, supports the sales well into the first half of the year. What's the situation in the U.S.? I mean, here we see a good level of demand. What do we see in China.
Well, the Q4 COVID spillover from Q4 into the beginning of 2023, the Q1, has an impact, I mean, on consumer sentiment. Post the Chinese New Year, we see some momentum coming back, but I would say this is still a bit early times to judge from here. What does it mean on the sales side, on the sales guidance? Well, on the sales side, on the car unit sales, we take a prudent approach given all of these uncertainties. Therefore, I mean, the guidance on the unit sales is on a same level or as prior year. I would say that also signals, I mean, our belief and our strategy to prefer margin over volume.
This is also embedded, I think, in this guidance statement. Inside, we want to increase the Top-End vehicle share slightly above prior year, and we have great additions in the portfolio to do so. If we think about, I mean, the first full year of EQS SUV to come, and also, I mean, the Maybach version of this beautiful vehicle, I mean, later in 2023. On the BEV side, we want to approximately double and think all of the vehicles, I mean, will now be in the market in 2023 to do so. What does it mean in terms of the margin guidance? Well, I mean, here, we guide at 12%-14%.
How does that refer to the 14.6 you could see in 2022? Well, volume flat, obviously. The slight increase in the Top-End has a slight benefit. On the other side, I mean, the increase on the BEV has a slight dilution effect. Probably the most important, we have the ambition to make the net-net pricing, namely, I mean, the pricing minus, I mean, the charges we still see coming on the commodity side, on the raw material side, on the supply chain side. We have the ambition to make that net-net slightly positive for 2023, which, I mean, given the significant uncertainties, I think, is a good level of ambition.
We do anticipate the used car vehicles to be at a lower level. We don't see it right now, it is embedded in the guidance as a matter of prudence. R&D should go up slightly. Guess what? We include in this guidance of the 12%-14%, a pretty well-known general macro risk protection of approximately 1%. I think you can read from that probably our internal ambition sits a bit at a higher level, but in this context, I think it's the right thing to do. On the PPE, on the investment side, we see a step-up. The next generation entry luxury MMA is on its way.
I mentioned before also the extension of our Kecskemét plant, the paint shops. We are approaching a bit of an investment cycle here. But we definitely keep in mind our overall objective in terms of investment CapEx, which we announced for the mid of the decade. Same thing on the R&D side, slightly up, due to the investment into software, MB.OS, but also the new platforms, AMG.EA and MB.EA. Cash conversion targeted at around, I mean, 0.8- 1, slightly above, I mean, 2022. On the Van side, pretty similar picture, I would say.
Sales, I mean, at the previous year level, with a net pricing, i.e., net-net pricing, around break even or, i.e., pricing compensating the expected supply chain and raw material evolutions, I mean, in 2023. R&D will go up with the investment, I mean, into VanEA. Same thing also, a bit of a risk provisioning on the on the on the Van side, which makes the guidance 9-11 for the margin. On PPE and R&D, I mentioned it already, the step-up in the VanEA, as well as in our footprint in Eastern Europe. That leaves, I mean, on the Van side, a cash conversion of 0.5-0.7. For mobility, we guide at 12%-14%.
I mean, that might surprise, I mean, some of you a bit. Let me explain why. We see the portfolio slightly down. We do anticipate a deterioration of the interest margin by roughly 2%, and also a bit of FX headwind. That leaves us rather with a 13%-15%, which I think is in line with our mid to long-term objectives in terms of return on equity for mobility. We also apply a bit of a risk provisioning here. Now, as you know, as we communicated, we embed the charging unit, which we announced in January, into MBM, and that causes some OpEx run up in 2023, and therefore we guide at 12%-14%. Almost done. Group guidance.
Well, I think that's pretty straightforward, is, if you look on the revenue, that is at prior year level. The mix, favorable on cars and vans, mobility down, so that makes it flat. On the EBIT side, the group EBIT side, slightly below 2022. Well, also pretty obvious, I think, with the margin guidance I mentioned on cars and vans and mobility. On the cash flow side, however, we wanna be at the prior year level, maybe more at the upper end of the range, despite again, higher cash taxes, which we expect in 2023. CO2, as Ola said already before, should be significantly be low prior year level. With this, I hand back to Ola.
Thank you, Harald. I just wanna finish up with looking at what the priorities are for this year. I started the presentation with a quick look back. What did we say a year ago and what did we do? Now we have a new set of homework for this year within the framework of our strategy, going electric, going digital, letting Mercedes be Mercedes, focusing on the place where we can win in the market. What are five of the main things that we need to pay attention to in this year to get it right and be able to deliver on the outlook that Harald just described? I think maybe the most important one is what I call safeguard our operating optimum.
It is this delicate balance between price and volume and a focus on high quality on the contribution side. It is a craft in its own right in shifting markets and of course, competitor behavior that you cannot always foresee. We have taken a very clear course on this in the past 2 years-3 years, and as you said, it is a focus on the margin quality as opposed to rushing into volume, and that's why we take this prudent guidance also on the volume side for 2023. We're gonna continue to scale the BEVs. Try to double that number this year, which is both an operational job as well as then get it into the market, but that story continues, and we are.
Have recently launched product and are launching more product. We also have to work on future-proofing supply chains. This short-term tactical dealing with supply constraints, it's not gone yet. 2023 is another year where we will work on that. We're seeing the constraints easing. I think, as time goes by, this shifts more into a mid to long-term focus as opposed to the short term. Battery raw materials, but not only battery raw materials, as I mentioned earlier in my speech, it's also looking through the vertical of what's happening on the compute and the chip side and how do you forge the right partnerships for going into the next generation of technology there as well.
Supply chains is more than, you know, what we experienced during COVID-19 or geopolitical issues. It's also part of the overall transformation of the auto industry. With regard to customer experience, the revolution next to the revolution that is going on in the auto industry, and we talk a lot about, you know, decarbonization, electric, digital, and so on, is actually what's happening on the business model in marketing and sales. We have quietly, in the background, step-by-step, introduced direct sales model in some European and overseas markets. This year, we're taking a big step up. We turned U.K., which is the second-biggest market in Europe, into the direct sales model at the beginning of this year, and it is our intent to also switch over Germany during 2023.
Germany being the third-biggest market worldwide, direct sales now really start becoming a real thing, and we're gonna add a couple of overseas markets to that. When you do that, you turn yourself from a wholesaler to a retailer, really. The customer relationship is one-to-one with the manufacturer. It changes your whole attitude of how you run the business. On the side of that, a lot will happen on the digital side, especially with the launch of the new E-Class and so on, but I don't wanna be a spoiler alert for the Mercedes-Benz strategy update next week on the 22nd of February, where we will lift the veil on what we call MB.OS, the Mercedes-Benz Operating System.
Please join us digitally, or some of you will be on location in California when we talk about that. As far as high-end, Top-End is concerned, yes, even though we're guiding flat on volume, we wanna have a slight growth on the Top-End side. Taking care of our very best customers is hugely important. We have recently also added additional formats, dedicated Mercedes-Maybach lounges, Mercedes-AMG stores, and so on in different markets. More and more is happening there in terms of the customer focus. Last but not least, I say here maintain cost discipline. I should rather say maybe maintain financial discipline. This transformation requires an extraordinary amount of investment. We saw the numbers just a couple of slides ago.
If we want to protect our strategic ambition in terms of financial results and also relative profitability, we cannot miss a beat on working on the efficiency side at the same time. This discipline, this is a more message to the internal viewers here of Mercedes listening to this presentation than maybe to you in the room, is, yes, we're investing at the high level. Yes, it's about new technologies, innovation, and taking Mercedes into the future. We need to remain Swabian. The first few years of this transformation, I'm a Formula One fan, and yesterday we presented our new Formula One car that will race soon. These first years of transformation, that's like qualifying. The race is still to come.
The bulk of the work is ahead of us, and we have only just laid the foundation for what needs to happen in this decade and into the next decade. With that, I would like to wrap up, and I look forward to the Q&As in the different sessions here in a few minutes' time.