[Foreign language]
Warm welcome to the Annual Media Conference of Volkswagen. This time we're in Autostadt in Wolfsburg, which is a place for events for families and lovers of cars. This year it's also here for the automotive, for the Annual Media Conference. Great to have you here or online in our virtual live stream. 2024 was a very dynamic year, be it the product drive, be it strategic things that needed to be fixed, or financial resilience. We'll hear much more by our CEO, Oliver Blume, and by our CFO of the group, Arno Antlitz, who at the same time is also the COO. Before we come to the numbers, the data, and the facts, we would like to give you an emotional start with our products.
2024 was a challenge, but we faced it head-on. Bold moves, real progress, and over 30 new models on the road. Software optimized, China redefined, cars built smarter at the right cost. A stronger lineup in North America with Scout unlocking new potential. In Germany, Zukunft Volkswagen makes us leaner and more competitive. The world moves fast. Expectations rise. We stay ahead. 2025 is when the new power of Volkswagen Group becomes tangible. The foundation is set. Now we bring it to life with fresh models and strong partnerships. Affordable EVs are here. In technology, we're setting the pace. Batteries, platforms, software. Focus. Unleash. Excite. Volkswagen Group is accelerating, driving straight toward global automotive tech driver. The new power of the Volkswagen Group.
[Foreign language]
Good morning, ladies and gentlemen. I'd like to welcome you to our Annual Media Conference here of the Volkswagen Group. Now, it's a strong product, it's passion, it's strength, and a very clear vision. You've just been able to see it on the screen behind me. That is precisely what our company is about. In a moment, we are going to get into a dialogue with you. Before we do that, our CFO, Arno Antlitz, and myself would like to say a few things to set the scene. 2024 was an ambitious year for the Volkswagen Group, but also a landmark year. When we look back, we see solid financial results, important strategic steps taken, and an unparalleled model push. The Volkswagen Group has shown that our company has strong fundamentals. Indeed, we're prepared for the challenges and for the opportunities of the future.
2024 was a year of crucial decisions for the Volkswagen Group. We decided to strategically consolidate our position of strength. 2025 will be a year in which we accelerate, a year in which the new strength of the Volkswagen Group becomes visible, becomes tangible, becomes alive in a very specific way. When it comes to our financials, we ended 2024 with solid results in a challenging environment, an environment with fierce competition. This financial stability now gives us the necessary leeway to continue to invest in the future and also to pursue our strategic goals. To achieve these goals, we must continue to work in a disciplined manner. What that specifically means is that we will continuously improve our product. We will further increase our quality. We optimize our cost setup. We boost our productivity, increase our profitability, and then also strengthen our financial robustness.
It is up to us to develop our full potential. We have a very clear vision for that, which says that by 2035, the Volkswagen Group aims to be the global automotive tech driver. A company that is driving technologies in the automotive industry. What gives us the self-confidence to have such ambitions? It's our strong brands. It's our unique combination of a global footprint and local manufacturing expertise. It's also our focus on our own qualities in combination with our strong partners, which are the best in their field. We are agile, we're willing to change. We are pursuing this strategy to leverage our economies of scale efficiently, strongly in areas that are very important for our transformation, like software, like batteries and platforms. All of that clearly is supported by a capable and passionate team.
Key steering instrument for our activities is our Top 10 program. Those programs have measurable milestones, clear responsibilities, and a systematic roadmap. In 2024, we achieved the goals we set ourselves, and in some cases, actually faster than we had planned. An important milestone was our qualitative leap in software development. We've restructured our own software company, CARIAD, and we have strong partners, Rivian in the U.S. and XPeng in China. In China, we've picked up speed with a new strategy. In North America, we have also pushed ahead with our growth strategy. The Zukunft Volkswagen Agreement was an important step in our home market. It's the foundation for an economically successful future at Volkswagen and also at our German plants and locations. In other words, we provide quality made in Germany at competitive cost. We are convinced that this is possible.
Across all of our brands, we have launched more than 30 new exciting models. It's the most extensive product push in the company's history. Great vehicles across all segments significantly improve quality and a sharper brand design. We're already now receiving a lot of positive feedback from our customers, which is very important for us, but also from the international media. In 2024, we further improved on our competitive format, if you will. Hard and consistent work and preparation according to a structured plan, just as an ambitious athlete would do. That is precisely our aspiration. We're not going to let up. In 2025, this new strength of the Volkswagen Group will become visible and will become tangible. Our product push continues with another 30 new models across all of our brands. They will be launched in this year.
At the IAA Motor Show, our brands will be focusing on the fully digital small electric cars. We have a world premiere to show their vehicles for around EUR 25,000. Affordable e-mobility, in other words, from the Volkswagen Group for everyone. In China, Audi is launching a model push with our partner SAIC. We are also starting battery cell production and cell skitter. Our autonomous ID Buzz shuttles are reaching production maturity now. Thanks to our intensive cost efforts and our investment discipline, we are now focusing on what is really important. Technology meets efficiency, in other words. The Volkswagen Group is driving innovation forward, but it remains profitable. Mobility is undergoing a radical change. As the Volkswagen Group, we want to be the driving force behind this change globally. We are determined, and we are self-confident because we have strong products.
We're well equipped with the right technologies that we have for the challenges and opportunities for the future. We have to continue to work now with discipline. We want to remain financially robust and to maintain our agency. We're moving at a rapid pace to shape the successful future for this unique group together across all brands in all regions. Thank you so much for your attention. Now my colleague Arno Antlitz, our CFO and our COO of the Volkswagen Group, will also now give you a brief overview of our financials. Arno, you have the floor, please.
[Foreign language]
Yes, thank you, Oliver.
You're welcome here in Wolfsburg in Autostadt and to everyone who is here online. Now, ladies and gentlemen, in 2024, we took important strategic decisions, and we achieved key milestones. With progress we have made in the various fields ranging from software to China and labor costs, we have laid the foundation for making the Volkswagen Group more competitive and financially robust. I would like to take the opportunity to thank all of our employees for their dedication and commitment. Against the backdrop of a challenging competitive environment, we have succeeded in delivering a respectable overall result. Vehicle sales in the full year 2024 totaled 9 million units, slightly below the previous year's figure. We are feeling the effects of intense price competition in China. In the rest of the world, our vehicle sales were at about the prior year level.
Despite the fall in vehicle sales, our sales revenue rose to about EUR 325 billion as a result of the improved sales revenue of our financial services division. Our operating profit was at EUR 19.1 billion, corresponding to an operating margin of 5.9%. The operating result was burdened by costs for the ongoing renewal of our product range, an increase in fixed costs, and restructuring expenses. Without these non-operating effects, we achieved an operating margin of 6.7% for the full year 2024. Passenger cars achieved an operating result of EUR 11.4 billion. The operating margin was at 5.3%, about one and a half percentage points below previous year's level. Traton continued its strong trend and was able to further increase its operating result to EUR 4.2 billion. Return on sales was 9.1%.
The financial services division achieved an operating result of EUR 3.1 billion, as expected, corresponding to a fall of 18% year on year. Let's now take a look at the various factors which drove developments in the operating result of the passenger car segment. Volume, price, and mix effects had a slightly positive impact of EUR 0.3 billion. EUR 1.1 billion are related to volume effects. The slightly negative mix effect is chiefly due to the decline in vehicle sales at Porsche and Audi in the full year. Price effects were slightly negative in 2024, with an impact of EUR 500 billion. The trend of clearly rising overheads started in 2023 and continued in fiscal 2024, which resulted in a clear burden for our result. Major contributing factors for the rise were higher personnel costs as a consequence of wage increases through collective agreements in 2022.
Extending our activities in, say, the battery business, building up Scout activities in the US, and ramping up the fully consolidated units in China led to a clear increase. One thing is clear. In order to guarantee Volkswagen's robustness in a demanding market environment, we have to provide decisive measures to counteract this development. We can only invest strongly in the future if we significantly reduce overheads and considerably improve the quality of our earnings. We have therefore launched extensive initiatives across all brand groups and brands to improve efficiency and productivity and to establish competitive cost structures. In this context, we achieved significant progress through the Future Volkswagen Agreement, including a new wage agreement for Volkswagen AG, structural measures to reduce overcapacities at the plants in Germany, and a reduction of about 35,000 in the workforce at the German locations up to 2030.
The Zukunft Volkswagen Agreement is the decisive prerequisite for making Volkswagen AG and its businesses in Germany sustainably competitive and profitable. However, the agreement we reached just before Christmas does not mark the end, but just the beginning of this process. Only by consistently implementing the agreed bundle of measures over the next few years will Volkswagen AG be able to realize the necessary net cost effects of over EUR 4 billion in the medium term. As expected, our proportional share in the operating result of our joint venture activities in China fell to EUR 1.7 billion in the 2024 financial year. In a highly competitive market environment, we found a healthy compromise between profitability on the one hand and volume on the other hand. As a result, deliveries in China fell by 10%, and the market share declined by 2 percentage points as anticipated at the beginning of the year.
Expenses for the expansion of our local development activities and upfront expenditure for the upcoming renewal of the model portfolio had a negative impact on earnings in 2024, but will pay off in the medium term. Over the next two years, we are focusing on the development and market launch of new local models that we expect to be absolutely competitive in terms of design, technology, and costs. Against this backdrop, we expect earnings in China initially to decline to between EUR 0.5 billion and EUR 1 billion in fiscal 2025 before stabilizing from the end of 2025 onwards and showing a clearly positive trend over the next few years. As announced, our capital expenditure reached a peak in 2024. Expenditure on property, plant, and equipment, and R&D in the automotive division increased by about 5% to EUR 37.9 billion in 2024.
We are keeping our Combustion engine vehicles competitive while investing in the transformation of our core business towards e-mobility and software. At the same time, we are investing in the battery business and in strengthening our position in the US through Scout. In the 2025-2029 planning round, we expect capital expenditure to total EUR 165 billion, EUR 15 billion less than in the prior 2024-2028 planning round. This brings me to the financial outlook for fiscal 2025. We expect a significant tailwind from our revamped model portfolio of exciting vehicles and a slightly positive volume trend in the markets outside of China. We expect the implementation of Zukunft Volkswagen Agreement and continued cost discipline to have a significant positive impact on the cost side.
On the other hand, the expansion of EV volumes, especially in Europe, and the ramp-up costs of the new models and our battery activities will have a negative effect on our earnings in 2025. On this basis, we expect the Volkswagen Group's sales revenue to increase by up to 5%. The operating return on sales is expected to be in a range of between 5.5%-6.5%, with a significantly weaker Q1 in terms of margin and cash flow. This outlook does not include possible effects from the introduction or adjustment of trade tariffs or possible further restructuring expenses. On the other hand, the possible relaxation of CO2 regulations in Europe has also not been taken into consideration. The net cash flow should be in the range of between EUR 2 billion-EUR 5 billion. Ladies and gentlemen, we have strong brands, great products, and we have global scale.
In view of these advantages, we cannot be satisfied with this financial outlook. It reflects the current challenges in the global economy and an industry that is in the midst of a fundamental transformation. We need to keep our combustion vehicles technology competitive and, while investing in exciting electric models and software solutions, achieve a regional robust positioning with a clear growth and investment approach for the U.S.. To achieve this, it will be crucial to continue to offer our customers highly attractive vehicles and, at the same time, consistently reduce costs and continually improve our earning power. This will be precisely our main focus in the coming months and years. Thank you very much. With this, I'd like to hand over to Sebastian Rudolph.
[Foreign language]
Thank you very much, Arno, and thank you, Oliver, for these two presentations. With that, let's get started.
We're happy to take your questions, dear colleagues. You either ask them right here in the room and please raise your hands if you want to put a question, or also ask your questions in the chat window here on our stream. I'm going to read those out then as well. Maybe you want to look to me for a while now until we see your hands here. Victoria Baltitz is going to start from Reuters. Please wait. That's Victoria right here. Wait until you get the roving microphone, and then we're ready to start.
[Foreign language]
Hello, thank you very much. I have two brief questions. Now, the fear of an economic downturn in the U.S. with the uncertainties that we see at the moment for Donald Trump's policies, and this is actually something that has shown that the U.S. share prices are plummeting this morning.
How concerned are you about the possible recession in the U.S.? How would you assess the customer sentiments in the U.S. at the moment? The second question, Mr. Blume, you announced a new vision for North America with a set of measures where you talked about local synergies. Could you say a little more about what these measures would include? I know that tariff policies and upcoming tariff policies are very hard to project, and it is hard to communicate also, I understand that. Can you say something to reassure investors that the VW brand has a plan up their sleeve if, in April, those tariffs will come into effect versus Mexico so we do not see a major hit on your financials?
[Foreignlanguage]
Perhaps let me start with our vision there, and then, Arno, maybe you will follow up on the economic situation in the U.S. and what our assessment of the situation is. First off, we're deeply rooted in the United States in the sense that we've made major investments in our own activities in our plant in Chattanooga and also in South Carolina. We're talking about $5 billion for each factory there. We also have a software partnership now with Rivian, which comes in at another EUR 5 billion, which is a powerful footprint. We are employing tens of thousands of employees in North America. Great success last year, 15% sales increase, unit sales increase for Volkswagen, 6% for the overall group than in the year before. We have a market share of about 4%.
If you look at that large US market, which is the second largest car market in the world, it shows you that with our big range of brands, there is certainly potential to leverage. This is exactly what we plan to do. We are investing in the future. We looked exactly at the segments, and the biggest segment clearly is the pickup and large SUV segment, which accounts for about 1/3 of the overall volumes, but half of all sales. It is for that reason that we decided to invest in that segment, not with a traditional brand of the Volkswagen Group, but by launching a, well, heritage US brand, Scout, where we have acquired the naming rights. That brand in the past was one of the co-founders of the pickup segment. Therefore, we are going to revitalize it with Electric Vehicles and range extender.
Last September, we've received excellent feedback. I have many advanced reservations for this vehicle also now. This is part of our vision for the future. The individual brands are now also going to refine their product strategy. Take Porsche, for example. The US market is the largest single market for that brand. We see a lot of potential for them there. That's our plan going forward. Talking about tariffs, there are a number of scenarios that we've calculated here. Mind you, this is a little more complex. It's not only about the U.S. and Europe. It's about Canada. It's about Mexico. Nothing's on the table right now as we speak. We will rely on our strong footprint in the U.S. and where we have invested, and we have plans going forward. I told you about that.
We also are hopeful that there's going to be a fair compensation between the U.S. and Europe when it comes to the trade balance. It takes many things to consider. It's not only commodities. It's digital flows of products, especially from the U.S. to Europe. There's quite actually something coming onto our continent. Therefore, we will be getting into a dialogue there and make our voices heard. Arno, would you like to say a word on the economic developments?
[Foreign language]
Yes, as you've said, there is a certain uncertainty in the marketplace. That's true. We can only focus on what we can influence, where we have agency. As Oliver just said, we have a global strategy, which we believe is spot on. We have a strong market share in Europe of about 25% that we want to defend in China no later than 2026.
We want to grow back and attack and grow our market shares. 25% probably will be another dip in our market share in China. We want to grow in the U.S., as Oliver has just said, the number of plants that we have. We are going to continue that very single-mindedly.
[Foreign language]
Okay, we'll stay with the agents. Frank Johansen from DPA was next. Wait for the microphone, please.
[Foreign language]
Thank you. Good morning, everyone. Question on the U.S. tariffs. Just to follow up, what may be surprising is that the U.S. is going to impose tariffs against Canada. You're just building one of your battery factories there. Now, with hindsight, wasn't that perhaps not a good idea? Are you reconsidering that investment? Because those batteries from Canada should have been delivered to the U.S..
Now, if they apply 25% of tariffs, it would not make sense, would it, with your investment in Canada, that is? That was number one. Number two, with Porsche, you announced that you are going to build more ICE vehicles. Is that only true for Porsche, or do you have plans for other brands as well? Because the sales numbers of EVs for all of them are rather weak. The third question, the carbon emission targets of the European Union. There have just been changes recently which are in favor of the car industry. Does it mean you are on the right track? Can you tick it off? Is this carbon business okay, or will we be back to square one in three years' time with that discussion?
[Foreign language]
Now, Mr. Johansen, let me start with Canada first. You are right in what you are saying. The battery cell factory has been cited there, and this is going to be a focus for the US market, but also for other regions when it comes to battery deliveries. Now, we have to see how this all plays out. We do realize that the US car industry as well is strongly vertically integrated, both in Canada and Mexico.
I would assume that discussions will be seen in that context, and we'll have to see and face up to what will happen. In terms of Porsche, our product strategy has been revised. That is also because we are currently looking at the ramp-up schedule for e-mobility across the different regions, because our strategy has always to offer a mix of ICEs, hybrids, and BEVs. Now, what we do is hedging. What hedging means in the segments, we are going to invest in all drivetrain options.
We expanded that plan in order to be as flexible as we possibly can, depending on the different speed at which the world regions develop. We are scrutinizing all the brands in that context because we have connected platforms, multi-brand platforms that we benefit from. For us, it is, if you will, an incremental revision of our product strategy. We are very pragmatic about it, depending on the individual market developments in the regions of the world. As far as the carbon emission targets are concerned, which is currently in place for 2025, I am very positive in terms of what the European Union has decided now. We were there two weeks ago meeting with President von der Leyen, and the EU did a reality check.
The ramp-up of e-mobility was not quite as dynamic as has been expected a couple of years ago when those targets were defined. Therefore, I welcome this push to apply a softer schedule over three years, 2025, 2026, and 2027 in one go, as it were. We're not going to let up on the carbon emission side. It's just that the transition period has been stretched a little to give more flexibility to the car makers. We, beyond that, have also agreed that the following steps up to and including 2030 will be also talked about in the next couple of months. Why? Because we want to set the right milestones. We want to revise how e-mobility is developing throughout those years. It's not only about products, mind you. We're in a very good shape. We are by far a market leader for BEVs in Europe.
It is about the general conditions of charging infrastructure, energy prices, possible subsidy regimes, especially for entry-level vehicles, market regulation, that sort of thing. It is different in every country. Therefore, I very much welcome the initiative taken by the European Union and also with the new commissioners.
[Foreign language]
Spiegel in Süddeutschland. Let's start with Lars Arbakovich, second row. Over to you, sir. Microphone will be coming.
[Foreign language]
Hello, good morning. Thank you very much for the presentation. I would like to follow up on the question of Frank Johansen because I am still not very clear about it. When we take a look at the drivetrain mix, you yourself are saying and underlining this in the strategy that you want to stay flexible. In concrete terms, what does that mean for the mix of drivetrains in the next years?
Maybe you can give us a split: EVs, hybrids, and ICEs. With Porsche, you already have a new wording for your electric strategy with Volkswagen, the core brand. You still have the target to no longer sell ICEs in 2033. Will you stay with that in Europe?
[Foreign language]
Porsche, just briefly to say that last year, Porsche had a share of electrified vehicles of 27%, half of them true EVs, EV only. That is a very positive result and quite a good situation compared to the competition. For this year, we expect a clear step further into the future. What is important, and this is true for all the other brands, despite all this, we want to have as big a flexibility as possible far into the 2030s and offer all of the various drivetrains. At the end, the number of electrified vehicles will depend on market development.
Customers decide what they will buy. We can make our contribution by having attractive cars on the market and also with the right pricing. Now, with Volkswagen, we have given a clear signal. End of the year, we will offer cars for EUR 25,000. Last year, we presented ID everyone. That will be at around EUR 20,000. On the volume side, that will bring a major push. On the other side, and that is our entrepreneurial obligation, we have to have a broad spread. Arno Antlitz said it, of course. That is a burden for our result initially, but it gives us a clearly higher robustness. The further targets we would show further milestones for, depending on the development of the global regions. We are prepared when customers want to move to EVs. We are prepared to move it up. This is just as true for Porsche.
80% could be delivered in an electrified fashion till 2030, but we deem it not to be realistic with the current development. For Volkswagen, we will do exactly the same. For 2035, we will see how transition will be done for Europe. It would be my wish that it should be designed a bit more flexible as you do it for 2025. We have responsibility for sustainability. We go with EVs, and we believe this is the superior technology for the future.
[Foreign language]
Let's stay in the second row. Alexander Demling, SPIEGEL, you get the microphone.
[Foreign language]
Good morning, Mr. Blume. Last year, we have heard about the Chinese market say you are not participating in the price fight. You have to wait for it to somewhat settle. Last year, not so much has happened.
What do you believe needs to happen so that this price fight comes to an end? How much consolidation do you have to see? What are you waiting for? Second question on the United States. In how far are you in a position in a certain case to move production from Puebla into the U.S.? Would it be possible to build certain cars in Chattanooga to circumvent certain tariffs? Would that be an option? Finally, you said that you are looking for contacts to the Trump administration in order to see your position heard. Do you have these meetings, and at what level do they take place?
[Foreign language]
Right. I would start with the last part of your question and then talk about China and Arno Antlitz as our Head of North America can tell us something about how we handle Mexico and Canada.
Contacts with the U.S. government, we have maintained those in the past, and we would wait for the following steps. First of all, something concrete has to be put on the table. Then, between the U.S. and Europe, there is the EU Commission that is called for. Once we have a new federal government, afterwards, we would start the discussions once the parameters are clear and would express our position. Now, on to China. What we can say is that the Volkswagen Group last year has worked in an economically feasible fashion as one of the very few companies in China because we are still strong in the Combustion engine and hybrid market. In e-mobility, we only have a very weak footprint.
Two years ago, we have changed our product strategy quite decisively with the approach to produce far more in China, develop far more in China for Chinese customers, and to build the cars there. At the end, success will have to happen in China. You have talked about the pricing competition. It will depend on having the right type of products, attractive products. We're developing them as we speak with our own China platform for the Volkswagen Group, with our own China electronic architecture, which we are developing together with our partner XPeng and with our CARIAD partner. With the first products, we'll come at the end of 2025 through Audi with a cooperation of SAIC, then with a big product drive in 2026.
The decisive thing, in particular when you're talking about the price competition, the decisive thing is to be in the right price position. For us, there's nothing to be said against developing at the same cost level and producing at the same cost level as our Chinese competitors do it. Once we have the right type of product with the brand image and the quality that Volkswagen Group has, we are confident that we will be able to have success stories as we have them with ICE cars and hybrids and to bring that into the electric segment. Maybe, Arno, you can talk about it.
[Foreign language]
Yes, tariffs, of course. Everyone wants to know how things will be continuing. In the automotive industry, you can't have a short-term reaction. You can't move a car and localize it overnight or in a couple of weeks. We're looking at it.
We see our American competitors having significant capital expenditure in Mexico. Parts of their business happen there. This is also true for other competitors. You simply have to wait and see what's happening there. There's one thing which gives a bit of stability in the long run. I have to preempt that. This has nothing to do with tariffs and the discussion in the U.S. You know, in the Volkswagen Zukunft agreement, we're reducing capacity in, I'd say, the German plants. We adapt them to market conditions. We have also decided that we move the Golf to Mexico to make space for further electric models in Wolfsburg. The Golf is the core of the Golf, is a European car, irrespective of the tariff situation. That would also secure a certain utilization in the mid-run.
[Foreign language]
Now on to Paulina Wirminghausen. Wait for the microphone. It's in the third row, please.
[Foreign language]
Paulina Wirminghausen from Süddeutsche Zeitung. Mr. Antlitz, you just said that you need to make your ICE vehicles competitive and at the same time invest into fascinating EVs. Now, how difficult is that dual-pronged strategy? When will be the year that you're producing the last ICE vehicles? The second question, you know, customers are not really overly enthusiastic about EVs. What do you expect of the incoming new government to improve that situation?
[Foreign language]
Okay, maybe I take that first part, and Oliver will talk about government relations. Now, what is important for us? If you look at the competitive landscapes, you see that about three or four years ago, we started with our new strategy, which is about investing into the last generation of internal Combustion engines. The new Passat, the new Tiguan. We're getting a new T-Roc as well.
At the same time, we have been very clear about ambitious ramp-up of EV vehicles. We continue to do that. The ID.3, the ID.4, the ID.7, very successful vehicle. That, yes, was a double effort. That was borne out in our upfront investments. Some capital market players were criticizing us for that. The EUR 180 billion investments, they said, was a tall order. We now see that this is justifying itself. We have still compelling vehicles, plug-in hybrid vehicles, the Golf, the Passat with more than 100 km of a driving range. At the same time, we have the BEVs in our product range as well. Yes, it is true that it weighs down on our financial KPIs, both CapEx and write-off. Depreciation, sorry. Therefore, for 2025, the outlook that we're providing now is rather moderate.
Only then do we expect a more dynamic growth and a further reduction of CapEx. The years 2025 and 2026 are important because we see investments into ICE vehicles will be going down because those new vehicles will keep going quite literally until the 2030s. This is also what our financial cycle is. Our advantage of reducing investments going forward is that in the future, it is only going to be 10% of our sales revenue that will be in investments. That will also allow us to consolidate the cash flow.
[Foreign language]
Mr. Wirminghausen, you asked the question about the ramp-up of e-mobility in Germany for that matter. It hinges, I must say, on a number of factors. Attractive products, obviously, that is true. The pricing has to be right. That is our job, clearly. There are the general framework conditions like charging infrastructure.
We have the LE network in Germany, which features more than 800,000 charging outlets. I would hope that the new incoming German government does not let up on growing the charging infrastructure. When it comes to our motorway network, and I drive a lot of Electric Vehicles, the motorway network is in good shape, but we need to do more across the country and secondary roads. Also, the pricing level is obviously much higher here in Germany than in other European countries in terms of electricity prices. If you look at China, their kW prices are two to three cents, right? Now, Germany, therefore, is clearly in different dimensions, by double-digit factors, I should say, higher than in China when it comes to electricity prices. We need more support there. Also, we need incentives, subsidies for Electric Vehicles.
It works really well in other European countries like tax models. My proposal was to perhaps make this very straightforward, very easy. With your annual tax return at the end of the year, maybe you put an electric car on your documents, like you use for any work done at your home that is also tax deductible in Germany. That is a good incentive model. You could offer things like social leasing, where we are offering products as well. France, for instance, is doing that. What I am saying is there is a plethora of different instruments. We need to talk to the government about that. We will submit our ideas, no doubt about it. Also, the industrial conditions have to be right.
The transformation of existing factories, not only car factories, but also component factories, should be supported to provide some good incentive for the auto industry to change over to BEVs. Same is true also of battery cell production in Germany. What I'm saying is there are different conditions, general conditions where the German government can help us, both when it comes to the ramp-up of BEVs, but also generally for the industry at large.
[Foreign language]
Now, Oliver, you just talked about conditions and expectations. There's a question from David Flicker and our colleague from Deutschlandfunk, which is very much in line with what you just said. Perhaps if you want to ask this question again, please drop us a line on the chat window. I think from what we've just heard from Oliver has already answered your question. Okay, let's continue with Stuttgart Zeitung, Stuttgart Nachrichten, Business Insider.
We do a big jump to Börsen Zeitung. We continue with Klaus Köster. Can you put your hand up, please? There is the mic for you.
[Foreign language]
Thank you very much. Mr. Blume, two questions on German as a business or manufacturing location and competitiveness. You said you are boosting competitiveness and with your efficiency program, you are only at the beginning of that whole process and not at the end. What do you think would be the biggest challenge to get this all done? What is the effort that you are seeing now in order to reduce your workforce even beyond the demographic curve? Volkswagen is a very competitive and appealing employer. How hard is it going to be? How expensive is it going to be? Is it going to be for you to downsize the company and motivate people to quit?
Now, secondly, as far as the exploratory talks are concerned, in the German government, do you see that there's a trend to considering more the interest of industry than before? Is that going to be tailwind for you when it comes to the competitiveness of German industry?
[Foreign language]
Mr. Köster, industry in Germany and the Volkswagen Group, let me cover that first. We are currently working to get a handle on all costs, beginning with R&D, material costs for our car production, including also fixed costs, including labor as well, of course, but also cost of sales are important. We have a very structured program in place. For more than two years now, we've been running performance programs to optimize the operations of the individual brands. Specifically at Volkswagen, we have implemented one part of this initiative to improve our economic situation.
We see that within our own company now here. If we look at our European operations outside of Germany, that is, and compare them with Germany, we are performing much worse in this country here. We are very confident, having said that, that we have achieved a good agreement at the end of last year. Our staffing structures will be adjusted to the production needs we have. At the same time, we are going to bring about structural changes in our factories, adjust capacities, and produce in a market-compatible way. There was really some pent-up demand, and we're responding to that now. That is going to help us to tap cost synergies. For this year, we also see the impact of the labor cost agreements, as Antlitz has said. We've signed them at the end of last year.
Now it's to move ahead with those downsizing measures. In the next five years, we're talking about more than 35,000 jobs to be cut, but in a socially compatible way. Yes, we're riding the demographic curve, which helps us in that. We have a number of financial incentives there, like partial retirement and also severance packages that we have in place. This gives us a very clear plan per year, per month, and per department or unit. We're going to track that. This is the initial year of two years where this is going to be really incisive. The full structural measures will become effective in 2027 and beyond because we're currently reducing the plant allocation schemes. We've shifted products to other production sites. What I'm saying is, yes, as Arno has said, it's a lot of work.
The agreement is just the first step, and we're now implementing it. In fact, it's true for other brands as well in Germany. Porsche and Audi also have similar programs in place, which will give us a much better, much preferred break-even situation, as it were. The risk situation is much higher than we had in the past decades, I must say. Therefore, we have to get it right when it comes to our cost positions, be more robust. When it comes to policy making in favor of industry's concerns, yeah, I think this is exactly the right approach going forward. In Germany and Europe, for many decades, we have been living well off our development work, of our general prosperity on this continent. This is what we have been able to found or to base our prosperity on, our freedom and democracy that we've enjoyed.
Our industry provides a lot of jobs, actually the largest share of jobs in industries. We have to be cognizant of that. Therefore, I welcome very much what the German government has been saying now and the incoming government, and also what the European Commission has said when it comes to R&D, when it comes to getting the conditions right for industry at large.
[Foreign language]
Oliver, might I add one further thing? You said something about the wording that I used with the necessary reduction of personnel to improve our cost structure. There are always two sides to it, and you have to distinguish between the two. The one thing is, when will the employees leave the company? When do they go to their well-deserved retirement? How do people leave the company?
The second thing is, and that's really the challenge, that's why I'm saying work is only starting now. We have to set up our business in such a way that with these 30,000-35,000 people less, we can still our business, do our business. Productivity in the plants, that's something which we need to work through in workshops. We need to build more cars with less people in indirect areas. My financial area needs to work with 25% people less. Tariffs, taxes, all these issues need to be covered. That's the issue that we need to work on. Both things that were reduction of staff levels with socially compatible means. On the other side, we have to make the prerequisites in order to have adequate productivity.
[Foreign language]
We'll stay in the lower row. Mr. Krook is next.
[Foreign language]
Henning Krook from Hamburg, hello.
I would like to address two brands that we haven't talked about yet. Mr. Blume, for the economic well-being of the Volkswagen Group, North America with Canada, U.S., and Mexico is of utmost significance. Your Spanish sub-brand, Cupra, wants to enter the US market by the end of this decade. Now, with Donald Trump, there's a new president with sometimes strange behavior. This brings me to three individual questions. First, for Cupra, will you stay with the market entry at the end of this decade in North America? Secondly, can you say where the cars will be vertically integrated and built? Will it be Puebla, Chattanooga? Will it maybe be a completely different site? The background of that question is your colleague, Mr. Antlitz, quite rightfully said you can't localize somewhere else overnight, and there will have to be localized content for the US. Mr.
Antlitz, you said the real work is only starting now. In the past, as a consultant with McKinsey, you have been active with such a big restructuring that you have now. One could imagine that you need more consultants. Will you have more consultants working for you than in previous years or less? A fast question on Lamborghini. Mr. Blume, at the upper end of your range, Lamborghini at the end of the decade wants to have a battery Electric Vehicle. I take it made in Italy is very important for Lamborghini. The assembly will take place in Santa Agata. Where will you do the body? Use the body shop. Will it be Bratislava? Will it maybe be a site of Audi's in Germany? Can you tell us a bit more about it?
With the car, will you have high-strength steels for the body, or will you use carbon materials, carbon-based materials?
[Foreign language]
Right, let me start with Cupra in the U.S.. We see the American market as being very attractive for the Cupra brand. In recent years, we have seen how great the brand image of Cupra has developed, the kind of great products we have there. We have a specific approach to build tailor-made US products by Cupra. Of course, we have to take a look at the prerequisites as they change in the United States for each and every strategy. It is important to check it against reality, what we are doing just now as well. We also have to take a look at how the relationship between ICE and EVs is developing in the U.S.. Yes, we side by that we want to go into the U.S..
Of course, we will take a very close look at how decisions maybe need to be changed. That also means should we go to the U.S. with Cupra, we need to see which sites we use for which products. First of all, we're planning for export of products, and then step by step you can think about this. As I said, our intention is there. We think it's attractive, but of course, we can't avert our eyes from what's happening in the U.S. I'd like to answer the Lamborghini question, and you could answer the rest on the consultancy work. Lamborghini, yes, we are planning to have an Electric Vehicle.
That's a big opportunity the Volkswagen Group has that with a joint electric kit that we have, that we structurize in various dimensions with various core development responsibilities with Volkswagen, Audi, and Porsche, that we have a possibility to use synergies here. Lamborghini, we plan to go on the platform that is where development is dominated by Porsche at the moment. We're doing it together with Porsche, with Lamborghini, Bentley, and Audi. It's a very sporty one. We'll come up to 2,000 horsepowers. It's a very sporty setup with a voltage of 918 volts, which will be a very specific setup for Lamborghini. Assembly will, of course, be done in Santa Agata as regards the body concept. They're not giving any statement yet. We're in the concept stage. Concept development has progressed pretty fine at a later point of time.
We will announce how we will do it, but I can promise it's going to be a typical Lamborghini, very emotional, and design show. It gives a great impression.
[Foreign language]
Just briefly, Mr. Krook, of course, we said we need to save money. We reduce overheads and consultancy work belongs to that. On the other side, in the future, we will have some questions where we simply don't have the expert know-how in our company. Although, of course, we have great staff and great people here. For example, with Rivian, we actually used consultants. And with other complex questions in the future, that will also be the case. There will always be some cases, some questions coming up where rightfully we will use consultants. Of course, we'll see it against the backdrop of overhead costs.
[Foreign language]
Right, let's go to the next slide. Sebastian Schmidt, Börsen Zeitung, over to you.
[Foreign language]
Yes, thank you so much. Moving away from the U.S. to China back again. In Q4, we had an operating result, an operating contribution that is in range for the entire year 2025. Mr. Antlitz, maybe you can briefly tell us what the counter effects are in China that make it so much a challenging year, more challenging even than 2024, and midterm capital expenditure, which is clearly lower. I would like to know which share is software investment in this and which share is going to the partnership of Rivian so that you reckon with less capital expenditure in the next few years.
The further additional question, CARIAD has a negative financial, more negative financial result last year than in 2023. Do you think there will be further growing losses in 2025 in that unit? What are the factors that it will be a bit less negative in the future? Thank you.
[Foreign language]
Let me start with China. Our guidance is $500 billion to up to $1 billion operating results. That is a bit weaker still. It has two reasons. Pricing competition in China is still very ambitious. At the same time, we want to strike a good compromise between volume on the one side and price on the other, which is why we will again reduce market share in 2025 in order to be on the attack in 2026. 2025 will be mainly burdened by investment. We are preparing to be on the attack in 2026. Take our China main platform that Oliver Blume addressed. We are working in a partnership with Horizon Robotics, bringing in driving assistance, driving functions, infotainment.
We'll have LFP batteries in the car and thus prepare in 2026 to have a far more competitive platform. Now, this costs money. It's CapEx. Then we have product partnerships, for example, between Volkswagen and XPeng. Volkswagen will launch two great cars, an Audi and SAIC also. This investment will actually be an additional burden for 2025. In 2026, I don't want to be too precise, but from the second or third quarter 2026 onwards, we will have everything in place in order to move forward full throttle and to regain market share in the EV sector. Those are the plans, but that means that 2025 will actually be burdened again. Maybe as regards the investment issue, CARIAD has been a bit worse in 2024 because a very important event happened, the ramp-up of the 1.2 software platform for e-Macan and Q6 e-tron.
That was a real tour de force for CARIAD. CARIAD has the task to maintain 1.1 and to ramp up the 1.2. With the cooperation with Rivian for the new platform for 2.0 and in China with XPeng, you can expect that CARIAD over the years will be clearly more positive. You know the business model. CARIAD's business model means that they invest or finance the investment, and they're paid by the brands through licenses car by car. On the one hand, the number of cars will be rising that will rest on CARIAD 1.1 and 1.2 platforms. CARIAD's income will be growing. On the other side, software expenditure because of the joint venture with Rivian, for example, will go down, break even will come sometime in 2026 and 2027. That's to expect. With midterm investment.
Roughly speaking, we can say that about 1/3 will go to Combustion engine technology, maybe a bit less, maybe 30%, and the rest will mainly be going towards future investment for e-mobility, for digitalization, and software. That's about a rough estimate. Of course, a lot goes into battery as well. Of the EUR 165 billion, about EUR 10 billion goes to capital expenditure for PowerCo and for our worldwide rollout. Also growth in the United States for Scout.
[Foreign language]
Next round will be International Guest, starting with Financial Times, then Lesico, and then the Wall Street Journal. Patricia Nielsen is right there. Financial Times, please. You have the floor.
Thank you very much. I wanted to ask, you mentioned that operating profit was hit by restructuring costs. Can you give a bit more detail as to what you mean? Is this mainly voluntary redundancy packages and other types of labor costs?
Secondly, I wanted to ask, Mr. Blume, you mentioned that you have clear targets or guidelines in terms of how much it can cost you to reach the goal of reducing 35,000 jobs in Germany by 2030. How much can it cost? How much are you expecting it to cost? Thank you.
Yeah, I'll start with the first question. The one-offs, let's call it restructuring, to make one example or some examples, it's almost EUR 1 billion, I think EUR 880 million for an early retirement program at Volkswagen AG, which is basically part of the overall agreement. This is a one-off. We booked that in 2024. Audi booked a significant amount of also magnitude, above EUR 1 billion, for example, for the run-out of the production in the Brussels plant. We had a EUR 100 million burden on MINAS, ramping down a turbine business.
Another restructuring was EUR 250 million burden at our Finco for ramping down our bank in Russia. These were some examples of the EUR 2.6 billion we adjusted for.
Yeah, in terms of targets, Arno mentioned the restructuring costs. I would like to talk more about the efficiency we are aiming to increase. In terms of labor costs, midterm, we have a target to benefit from EUR 1.5 billion a year. This year, we are expecting around EUR 1 billion. At the end of our planning round, in terms of all measures we are implementing, also the reduction of employees, we have the target to have a benefiting part of EUR 4.0 billion a year. This is part of an overall performance program we are running at Volkswagen. This will lead at the end to EUR 15 billion a year.
We have three important figures: EUR 1.5 billion labor cost, EUR 4 billion everything together with plant reduction, personnel reduction, and EUR 15 billion for the whole program.
[Foreign language]
[Foreign language]
Thank you. I have two questions. I understand that the carbon emission targets account for EUR 1.5 billion, or you would have paid EUR 1.5 billion. Now, with the easing and the stretching to three years of European targets, what would your savings be? I understand your revenues are going to increase by 5%. What about unit sales? Are unit sales growing as well this year, or will they be lower?
[Foreign language]
Okay, let's start with the second one first. I need to explain that first. Unit sales are expected to be flat by and large, we believe, so on the level of the prior year. We need to differentiate by the different regions of the world.
Now, in Europe, we expect a slight increase, also a slight increase in the U.S., and in China, we expect a reduction. Now, there's one thing that needs to be borne in mind, and you know that the unit sales or volume sales of our joint ventures in China are not in our balance sheet. They're part of the equity result, not the volume sales result, but only the financial results. Now, if we have constant deliveries forecast for the entire world, we would expect still an increase of revenue because where the revenue is counted in our income statement, it's the Europe and U.S. where we expect a slight increase and a reduction in China. That reduction in China is only seen, or mostly seen, in the share of the operating result of $500 billion-$1 billion i.e., in the financial result, as we talked about that.
This is the reason why we are expecting a positive development. One more thing to say is that we're confident that we're seeing good momentum in Europe. Why? Last year, we had volume sales to the level of the prior year, but we had a robust, a strong order bank. The orders that we already had in the business, we used as a stabilizer and reduced them down to 850,000 in Europe. This is now back to the pre-COVID levels. What it means is in the first two months has allowed us to increase the order intake significantly. Our order intake now is more than 100,000 vehicles already. I'm seeing very positive signals in the first two months of the year. The second question was about carbon emissions. Yes, that was our target that we had forecast just around Christmas.
We have believed that the theoretical burden for 2025, given our EV ramp-up schedule, would have been exactly that. Now we are seeing those two factors. For one thing, it is a more positive order intake. Now, for the ID.7, we have an order intake on the level of the Passat. We are confident when it comes to EVs pushing this whole trend. It is a much better momentum, if you will, than we had expected. We need to get better, of course, no doubt about it, because we had 18% in the fourth quarter in Europe last year. Now, we have to be more than 20% of an EV share, and we are getting there, we believe. That will allow us to reduce that burden. As Oliver has just said, we have three more years now, or a total of three years to meet the emission targets.
We still expect that in 2025, we're not going to hit the target, but we can compensate it throughout 2026 and 2027. It's not alleviating the pressure at all because at 2026 and 2027, we need to overperform with the ID2 and the ID2 family and the ID1. It gives us a total of three years, right? This is why we welcome the proposal made by the European Commission, just because it gives us more breathing space in 2025, not to pay any fines, so actually reinvest that money into our business. In 2026 and 2027, we'll be hopefully performing better.
[Foreign language]
Perhaps to add a few more facts and figures here, we're obviously very happy about the very positive order intake that we've noticed now at the beginning of this year. Also, thanks to our new products.
For EVs in Europe, we are by far the market leader now. Arno Antlitz mentioned the ID.7. The ID.7 is the market leader in Electric Vehicles in Germany now, and that is very positive. When it comes to the first, for the six best-selling Electric Vehicles in Germany, all of them are from the Volkswagen Group. Out of the ten, the first six are the Volkswagen Group, and that provides us a good tailwind.
[Foreign language]
We go to The Wall Street Journal. Stephen Wilmot, you get the microphone. Floor is yours.
Thank you. You answered a lot of my questions, thanks to the question from my colleague from Lesicco.
Maybe you can complete the picture in terms of current orders and where you expect this up to 5% growth to come from by explaining how things are progressing in the U.S., because you said you expect growth in Europe and growth in the U.S. to offset the weaker market share in China. I mean, is this growth coming from volume growth, or is it higher prices? Where is this growth coming from? You've kind of answered that question in Europe, but maybe you can just complete it in the U.S. Secondly, you talked about your CapEx guidance, including plant investments in the U.S. for Scout. I'm just checking, are there any other plant investments included in your guidance for this year in the U.S.?
Yeah, Mr. Wilmot, I take this question. Growth in the U.S., we had really good growth momentum last year already, specifically brand Volkswagen.
I think brand Volkswagen was even 16% or 18%, something like this, up in the U.S. In 2025, the brand will bring the all-new Tayron. We want to grow in ID.4. We bring the ID Buzz, and we want to continue with our current model portfolio. This is a Volkswagen brand. Obviously Audi as well. They have the renewed model lineup, Q6, e-tron, Audi A6, Audi A5, which are brand new cars, which will also hit the American showrooms throughout the year 2025. Porsche, I do not know, Oliver, whether you want to comment on Porsche.
Yeah, at Porsche, we have a complete new product portfolio with five of six model lines. The Cayenne is already in the market. The sales last year for the Cayenne was the best year ever.
We are entering the U.S. market also with the new Panamera, the new Taycan, the electric Macan, and also the new 911 for the first time in history as a Hybrid version. We are expecting also a continued growth in the U.S. The U.S. is the biggest market for Porsche, with a huge fan base. With a new product, that sounds very promising.
In terms of investment, of course, the major investment is Scout. We are very excited about this project. It will give us the opportunity to enter these all-American segments, C-Pickup, B-Rocket SUVs, some of basically the most promising segments in the market, and we will continue to ramp up there. We have investments in the planning for the Tayron, which is invested in Mexico. We also start the ramp-up of our battery factory in Ontario in Canada.
These are the major investments we included in our investment planning for 2025 for the U.S... Of course, model improvements in Atlas, Atlas Crossboard, but these are smaller amounts.
[Foreign language]
With a view to the time, we would go to the last round of questions and start with DPA AFX, Marco Engemann. Please bring the microphone to him. Comes from the other side. Over to you, sir.
[Foreign language]
Yes, thank you so much, Mr. Antlitz. You have just briefly referred to it that you have planned for EUR 10 billion batteries in midterm financial planning. In your speech, it sounded as if you had tweaked that a bit. Did you reduce capacity somewhat or delayed them, or how do we have to imagine that?
[Foreign language]
Yes, it's clear. I can give you the number. Two or three years ago, in some in the 180, we had EUR 15 billion included. That is, of course, our task. We are adapting the ramp-up of capacities in PowerCo to the demand. The way you have to see this is we are staying with the three factories in Salzgitter. We are looking forward to the ramp-up in 2025. We have Valencia and Ontario in Canada.
Such a factory is not a kind of monolithic thing. You invest into blocks per factory. A block has 18 or 20 GWh . What we have done, the SOPs for the three factories are fixed, but the ramp-up of the individual blocks, for example, in Canada or in Valencia, we have delayed a bit time-wise, simply because we are planning less electric cars than in the past once we started with PowerCo. We have more ICE cars now. Thus, investment automatically is delayed somewhat from this planning round.
Of course, we're keeping the ramp-up, and we have simply adapted it to the market need.
[Foreign language]
The one but last question, Kate Ferguson, Deutsche Welle. Over to you.
[Foreign language]
Hello, good morning. Thank you. Hello and good morning. Thank you. First question goes to Mr. Blume. We know there have been meetings with Chinese investors as regards the use of German factories. Can you give us a short update on these meetings and how a potential cooperation could look like? To Mr. Antlitz, you have mentioned that you want to have, or that you have to have a more robust setup regionally. Apart from the U.S. and China, do you also look at other countries, special countries like India, for example?
[Foreign language]
First of all, I'd like to adjust one thing here. There have not been any talks with Chinese investors as regards the use of German factories.
What we do, however, of course, we do have partners in China, and the topic of Europe actually comes on the agenda, and we are being asked how something like that could be done. As regards the use of factories of the Volkswagen Group, there is no decision. We are giving information as to how we would do something as a lot entailed, not just factories. You also need to build up a market because we have long partnerships for decades there. We are available, of course, but to make it very clear, there was a wrong interpretation once German plants. We have not looked at them so far.
[Foreign language]
Ms. Ferguson, thank you very much for the question. I strongly focused on the three big markets, but we're not giving up the others. In South America, we want to continue to play a leading role in South Africa.
We have a large factory there. India, that's a very good buzzword here. We've been in the Indian market for a long period, since 20 years or something. We've been in India with a plant. We have very successful products there when it comes to market entry, not so much volume. In India, you need very specific requirements. You have to be very cost competitive. You have a very good cost basis. You have to have local content. You have to have economies of scale. The market is now moving towards EVs. We want to continue to work on the Indian market. We want to be present on the Indian market, but we'll very likely only be able to do it with a partner, and we'll only want to do it with a partner.
It has something to do with the fact that as regards the investment, we focus our approach. At the moment, we're in very good talks. It's much too early to communicate something, but we don't want to give up the Indian market. Quite to the contrary.
[Foreign language]
FSZ is the next question. Oliver, they had asked a question on defense, a son of Poles from Hamburg, but it has been asked by Kate Ferguson. It is with Mark Schmartz now from Donau-Körig. First row, please.
[Foreign language]
Thank you. Now, after the English question, I'm going to ask a Bavarian question. I'm from Ingolstadt. We are a big site of CARIAD. You didn't say a lot about CARIAD. What about its future? What about jobs at CARIAD? What about the structure? Is that going to be sidelined between Rivian and XPeng?
[Foreign language]
Okay. CARIAD.
In the past two years, we've been looking into turning around CARIAD. And you know that really well. We had some larger problems there in the past years. The positive news is it has worked. Products have started successfully in different markets. We're getting good feedback for the software. That was a great big effort by the new CARIAD management team to get that done. This has happened. At the same time, we also looked at the future software requirements of the different regions because the ecosystems are different. China and the Western world is quite different. We'd like to move to a zonal architecture very soon. That is why we have partnerships with XPeng in China and Rivian in the U.S.. CARIAD in the future will be playing an important role in the general network of our global software strategies.
In the past months, we also worked on a software governance scheme. In other words, we are spelling out who's doing what in what part of the world, where the responsibilities and the objectives for each of those operations are. In terms of CARIAD, we now need to work on the existing platforms that we already have because those are the ones that will be there to stay way into the future. In 2030, the E3 1.1 and the E3 1.2 software package developed by CARIAD now. We are just launching it very soon with new vehicles. CARIAD will be playing an important role in our cross-divisional responsibilities, autonomous driving happening in China. This is going really well with our partner, Horizon Robotics. The name now is Carizen as a combination of CARIAD and Horizon Robotics. Arno has talked about it.
We also have a partnership with Bosch, which is now on a solid footing, which allows us to develop a European stack for autonomous driving. CARIAD also leads on infotainment and data management for cloud services in the backend. With that in mind, there are important responsibilities for the future. However, we need to rescale the operations at CARIAD depending on the requirements needed for that operation. This is true for dimensioning of tasks. This is an ongoing process. We do that for all of our operations, and CARIAD is no exception there. Again, I am saying it is an important part of the software strategy, but the partner strategy is just as important to have the right partners for the right solutions that we need. I would like to go back to something that Ms. Poiss has asked. Earlier, we talked about China. Ms.
Poiss asked about defense. First off, I think given the current geopolitical situation, what we are seeing now in Germany and Europe is exactly the right decisions that are being taken in the sense that we need to invest more in order to be safe again. We are not in specific talks about what Volkswagen can do. My take on it is that if there was the option of military vehicles going forward, we would have to look at the concepts. We did that in the past. Volkswagen Group has automotive competence. We are ready to provide consultancy and advice. At where we are, this is just open-ended. Initiatives will be brought forward by the defense industry more than anything. Therefore, there is nothing we can report about things that are ongoing.
[Foreign language]
With that in mind, Oliver Blume, Arno Antlitz, thank you very much for those explanations. Now to all of you, either here in Wolfsburg or in Dausstadt and those of us joining online, thank you for this very constructive exchange. If you still have questions, please talk to us. The communications team is always at your disposal. Thank you very much indeed for your attention. See you. Bye-bye. [Foreign language]. This was our annual media conference of Volkswagen Group. Thank you very much, everyone.