Björn Scheib – Investor Relations Dieter Zetsche – Chief Executive Officer, and Head of Mercedes-Benz Martin Daum – Member of the Board of Management Bodo Uebber – Chief Financial Officer

Tim Rokossa – Deutsche Bank Arndt Ellinghorst – Evercore ISI Patrick Hummel – UBS Jose Asumendi – JP Morgan Harald Hendrikse – Morgan Stanley Michael Tyndall – Citigroup Martin Vika – Redburn Stephen Reitman – Societe Generale Horst Schneider – HSBC Christian Ludwig – Bankhaus Lampe Stuart Pearson – Exane BNP Paribas Richard Hilgert – Morningstar

Welcome to the Global conference call of Daimler at our customer's request this conference will be recorded. The replay of the conference call will also be available as an on demand audio webcast in the Investor Relations section of the Daimler website. The short introduction will be directly followed by a Q&A session. [Operator Instructions] I would like to remind you that this teleconference is governed by the Safe Harbor wording that you find in our published results documents. Please note that our presentations contain forward-looking statements that reflect management's current views with respect for future events. Such statements are subject to many risks and uncertainties. If the assumptions underlining any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. Forward-looking statements speak only to the date on which they are made. May I now hand over to Björn Scheib, Head of Daimler Investor Relations. Thank you very much. Björn Scheib: Good afternoon ladies and gentlemen. This is Björn Scheib speaking. On behalf of Daimler, I would like to welcome you on both the telephone and the Internet to this Q2 results conference call. Today we are very happy to have with us the CEO of Daimler and Head of Mercedes-Benz passenger cars, Dr. Dieter Zetsche. In order to give you maximum time for your questions Dr. Zetsche will begin with the short introduction directly followed by Q&A. During the Q&A session Martin Daum, Member of the Board of Management responsible for the Daimler trucks and busses, and our CFO Bodo Uebber, Member of the Board of Management and as well responsible for the Daimler Financial Services will also be available to answer your questions. Before I hand over to the Dieter Zetsche, I'd like to address and highlight two topics very briefly. As already discussed with many of you on the phone in the cause of the last few days, we are unfortunately able to come on, on any report leasing the antitrust violation speculation within automotive industry. Therefore please understand that there is a general rule we do not comment on any of these speculations. Beyond that we are also unable to comment on any further related questions on this matter. Therefore I would also like to add a second topic. There is no new information regarding the ongoing investigation by this took up a public prosecutor's office in connection with the diesel or our internal investigation upon the request of the U.S. Department of Justice. All of your aware of our statement on this subject, we continue to fully cooperate with the authorities in our experience in particular with the U.S. authority has clearly shown that our conservative communication supports the constructive dialogue with all of these authorities. Therefore please understand and please don't try that we cannot comment on depending proceedings and cannot give further details. Just now I would love to hand over to Dr. Zetsche.

Thank you, Björn, and good afternoon from me as well. The auto industry is currently making headlines and not good ones. I know that many want more clarity now but I can only affirm what Björn Scheib has already said we're well advised to not to engage in speculation, what we can comment on our second quarter results. We just put three months behind us with best ever sales, best ever revenue and once again significantly higher earnings. This strong core business is the foundation for our success in our future business. We have the numbers in front of you so I'll keep all of you brief before we look to the future. In the second quarter we sold about 823,000 vehicles, 8% more than the prior year period. We increased our revenue by 7% to €41.2 billion. Our EBIT grows by 15% to €3.7 billion. Coupé net profit slightly improved to €2.5 billion. Free cash flow of our industrial business grows to €3 billion in the first half of the year. Net liquidity now industrial business amounted to €18.4 billion at the end of June. Now let's turn to performance of our business units. Those 595,000 cars sold, Mercedes-Benz cars achieved the best ever quarter in our company's history. Proven by the way was the 52 record month in a row. And the second quarter sales were especially good in Europe with plus 6% and above all in China with plus 28%. Among all current models the E-class sedan and states posted the strongest growth with 93%. Mercedes contributed to the growth with the sales increase of 12%. The top seller among them was GLC with an increase of 40%. As expected S-class sales decreased near the introduction of the successor model with its market launch we expect significantly higher unit sales in the second half of the year. Smart sales declined by 7% in the second quarter. Last month we launched the electric Smart models in Europe incoming orders are very promising. Our EBIT at Mercedes-Benz cars rose 70% to €2.4 billion. Return on sales at Mercedes-Benz cars reach 10.2% so, once again achieved what we aimed for profitable growth. This is all the more remarkable since we invested heavily in our future including in the expansion of our global production network and in our electric mobility. With 116,000 units sold second quarter sales at Daimler trucks came in 8% higher than last year despite the ongoing difficult economic situation in some markets. The main driver was strong growth rates in Indonesia and the Middle East. Sales in the NAFTA region grow slightly the 4%. The same applies to Latin America with 4%. In Europe reached the previous year's level. Our EBIT came in at €543 million and return on sales was 6%. Expenses for customer service action at Mercedes-Benz trucks weighed on results by the efficiency measures had a positive effect. Mercedes-Benz vans passed the 100,000 mark in the second quarter of the, for the first time. Our vehicles in the midsized segment did particularly well, V2 and V-class unit sales increased by 17%. These two vehicles also made a significant contribution to further improving our position in China with plus 49%. Developments in key regions Europe plus 1% and NAFTA plus 3% and Latin America plus 31% were also positive. That €358 million EBIT was below the strong prior year level probably return on sales of 10.8% our vans were still significantly above the target level. Daimler Buses sales increased significantly in the second quarter to 7,500 buses and chassis which represent 8% growth. EBITDA mounted to €64 million and return on sales was 5.5%. Daimler Financial Services new business rose by 16%, and the end of Q1 contract volume reached €134 billion. EBITDA rose to €522 million, return on equity was 18.8%. We are increasing investments in new mobility services are well balanced out by a strong core business. In some, the earnings development in our business segment shows our strategies taking effect. We have set ambitious goals and we achieving them, in terms of volume and profitability. This brings me to our outlook for 2017 and beyond. First to developments in the current year, we expect to significantly increase group sales in the full year. At Mercedes-Benz cars, we aim to grow significantly once again. Especially our E-Class family which will be completed in September with a convertible we contribute to this gain. China remains the global charge on this growth pad. The first half of this year Mercedes-Benz was at the top of the premier segment in China for the first time. Of course with currencies where we are at the end of the year but we are well positioned with our ever-increasing localized product portfolio. At Daimler Trucks, we now expect a slight increase in unit sales for 2017. We intent to further strengthen our strong market position, especially in the NAFTA region. Mercedes-Benz Vans is planning on the significant increase in sales. Above all, we expect strong growth in Europe at the end of this year we will continue to expand worldwide sales with our pick up. At Daimler Buses we also expect a significant increase in sales. We plan to maintain the top position in our core markets. Daimler Financial Services also expects significant increase in new business and further growth in contract volume in full year 2017. Based on these plans and our market expectations we expect to significantly increase group revenue and group EBIT this year. We want to achieve EBIT significantly above the prior-year level at cars and slightly above the prior-year level at buses and financial services. Due to the positive market development in North America, we have adjusted the outlook for our truck results. We now assume that trucks will achieve EBIT around the prior-year level. Same applies to our vans based on the strong sales performance we now expect EBIT around the prior-year level. All in all development at Daimler clearly positive and this is more important than ever. Mobility will become more and more multi layer over the next few years and the potential for our business is high. What is clear however is that a good foundation is required to scale up new ideas. Our long term strategies therefore based on these two pillars. The strong core business and promising case business. At Mercedes-Benz cars our product offensive continues in 2018 above all in compact car segment. We have a new architecture. We are increasing the number of compact cars from five to eight models. And we passed automation free mobility we continue to focus on the three effective pillars, highly efficient combustion engines, hybrids and full electric drive. At present, public debate about diesel is creating uncertainty especially for the customers. This topic is highly complex both technically and legally. We have been working on it systematically and internal investigations for a long time. We are fully cooperating with authorities. Regarding the future of diesel engines, we are focused on the innovative strength of our engineers. Our new diesel engine OM 654is a good example that technical improvements can achieve more than driving bands. In addition, we took proactive steps last week with announcement of specific measures. With the software updates we are making use of the latest findings in this year and from the development of our new engine generation. This enables us to significantly reduce NOx emissions of our Euro 5 and Euro 60s of vehicles and the normal driving conditions. Of course diesel engines have to be assessed in terms of the NOx and CO2 emissions but when that is done objectively it becomes clear that diesel engines are worth fighting for. That's why we advocate for them in our customers interest not because we have to but because it's the right thing to do. We have just underlined our pioneer role in technology with super crate. Looking ahead, we will continue to build on our leading position in safety, connectivity and efficiency. In order to turn our growth into profits, we are optimizing the efficiency of our anti-companies step by step. Development and production are becoming increasingly flexible things to more modularity, more localization and more harmonization of components. At Daimler facts we are currently optimizing our entire structures and processes. This is how we aim to reduce costs by €1.4 billion by the end of 2018 and to achieve our target for internal sales which is 8%. In order to make our business even more customer focused, we are currently examining the possibility of organizing the divisional structure of our group into legally independent entities. We will inform you as soon as there is more to be said about that. No decisions on it have we made yet. But the decision criteria are clear. We wants to further improve the robustness of our individual business areas and ensure that we are even better at utilizing growth opportunities in our various market because that's the best way to safeguard the future for our company. In this way we are actively taking on the cyclical and structural challenges of our industry and benefiting from them. Of course we said our goal in the future we aim to achieve the same thing in the case areas that we've already achieved in our core business today. The number one position and we are in excellent position to do so. We have commercial vehicles as well, as all old patterns of cars. We are steadily progressing with the connectivity of our vehicles to the new digital services. The best examples we bought our pioneering and connecting drivers, fleets and orders by real-time data. In autonomous driving we are taking the next big step with the S-Class. In three to four years we want to put fully autonomous cars on the road. We have already built a strong position with our mobility services especially in Europe. Today they are used by 14.5 million people worldwide. The growth of opportunities remains immense. In addition, we continue to push forward with the electrification of our fleet. Our electric truck goes into production this year in limited volume. Next year is our electric bus and more than 10 electric cars will go into this year's production by 2022. With these efforts we are ensuring a high degree of flexibility right from the start. Production will be carried out within the existing Mercedes network; many of our plans, label agreements for this conformation have already been adopted most recently in diesel car. Furthermore, we concluded the strategic operation agreement in China with our partner classes. And while we do two of this, we are also renewing our corporate culture. The majority of ideas coming out of our leadership 2020 initiative are already being implemented. The transformation of Daimlers is going ahead at full speed and we will keep up the pace, the transformation of our product for digitalization in the expansion of our business into mobility service provider, and in the implementation of leadership 2020 for future-oriented corporate culture. In that way we always try to add balance between our current financial strengths, in our investments, in our future. I now look forward to your questions. Thank you. Björn Scheib: Ladies and gentlemen, you may ask your questions now. The operator will identify the questioner by name but please also introduce yourself with your name and the name of the organization that you're representing. A few practical points, please avoid using mobile phones, as well as hand free speaking systems and please - for sure please ask your question in English. Last but not least, as a matter of fairness, please limit the amount of questions that you're about to raise to a maximum of two. Because you're going to give everybody on this call the opportunity to ask the question. Now before we start, the operator will again explain the procedure.

[Operator Instructions] The first question is from Tim Rokossa, Deutsche Bank.

Yes, good afternoon. Thank you very much. It's Tim from Deutsche. I would have two questions please. The first one is on the review of the group structure. You are certainly a very group I'm sure there's a lot to consider but could you perhaps give us a feeling for the timeframe that you believe it will take to find less as we view and also personally I believe this is correctly the right phone number but I feel that the reason you stated this morning was fairly vague. Are you happy to put a bit more flash to the bone there and perhaps even give us some examples? And then, as a second question, you made it very clear you don't want to answer any of the cell issues, so I leave that a side and think about the potential related consequences. So far your investors were partly compensated for the weak share price development and all sorts of risks like diesel and so and so forth with a very healthy dividend. Assuming not just payout, there would be more than 5% currently. You previously said that you like to be able to keep the absolute payout high also in difficult times. How should we think about that message and the sustainability of the dividend in light of what we have known recently? Thank you.

Tim, thank you for your question, and also your understanding with regard to your question with the group structure, we are in the early stages of strategic thinking about and analyzing what Dieter has announced, and therefore that's not -- nothing further to ask also with reductive timeframe, there is more details on board, of course we will inform the market about further steps and proceedings. Your second question with regard to the dividend, as we have always said based on our liquidity structure or earnings development of course we are able to sustain or dividend development and from today's point of view of course that was also be true after the Q2 call. Of course, we have to balance risk and opportunity especially from -- when read our risk reports but other than this we have a stable dividend policy. The 40% as a payout ratio of course is a guidance we do have in the market as we stick to this guidance.

Okay. Thank you.

And we will decide about the dividend in the beginning of next year.

That's right.

Thank you. The next question is from Arndt Ellinghorst, Evercore ISI.

Yes, thanks. I'm Ellinghorst from Evercore. Thanks for taking my questions. I've got two please. First one is for Martin Daum. You've now been at the top of on the truck for more than a year. SO how satisfied are you with the current quality of the truck earnings and what areas are of improvements if you really left and I'm especially looking into the European cost base and the Asia business operations potentially and then second just following from Tim's question really because I do think it's really quite significant news from this morning that you are building separate legal entities within Daimler. Could you may be at least tell us why you've decided to announce that today and what are potentially benefits of establishing separate legal entities and what has really fundamentally triggered that decision? Thank you.

Okay. Arndt time is flying, but I'm not one year in the job. I'm just four months in the job. But it feels like ages but it is good. I mean, it's pretty easy there is a huge potential in the Daimler Truck hope. For me it's - I have the experience in my more local hole. How you successfully lead an industry exiting products that improve the business of our customers that means you think from the customer side, put it into product and you don't have to worry. You leverage our global scale. We have such an incredible amount of knowledge and scale inside the Daimler Group and there are so many untapped potentials and I elude that. And I would love to run a company with people who are burning to win and that are willing to go really the extra mile to bring that win hope. We are by far not done in the truck group. We will be never done but we can always improve and we will.

And Martin, when you look at the business and you benchmark yourself to you are peers, are there any particular areas why it has moved to head off down the trucks at this stage?

Yes, but we will answer on the marketplace. The knowledge we get and we can bench I guess and generally in Misava [ph] global scale and there is - they have good examples how you improve business. To the second question and I apologize to slightly correcting your assumption and your question, we have not decided to setup new legal structures within our group and we have to decide it to analyze this possibility and that to some extent already leads to your second question about timing whether small group in our company, which was weighing idea and trying to get first rough understanding raw feasibilities and we now came to appoint where we could not continue this thinking without informing the market that's where we are today and that is a simple -- the reason for the timing, they are up-to-date. And with that, I would like to handover to Bodo to give you a little more lead as far as reasons are concerned.

On to your question, we have been using the customer dedication program to align the organization of the entire group more strongly with the division you know, this program was started a couple of years ago. The results have been the strengthening of the division shortening decision-making process, speeding up in processing and customer focus and so we can address different requirements even better than before, so that has been done Interviewer: eh past. Adding to this already established education because we analyze the option to reflect the divisional structure of our company through legal separated business unit and we are aiming for further leverage growth and earnings potential for individual markets with this program and as a lead effect, there is nothing decided, we are analyzing this and keep you informed about the progress.

All right. Thanks a lot.

Thank you. The next question is from Patrick Hummel, UBS.

Yes, good afternoon gentlemen. Thanks for taking my question. First one relates to next week's deal summit in Berlin, you have proactively announced this voluntary recall for software upgrades for 3 million diesel cars affected. What's the risk in your view that you walk out of this meeting in Berlin and the government will just say that's not sufficient. We will ask you for more even if the straight rule of the law would not require anything else but of course politics could put a bit more pressure on the OEMs in particular in light of the news for the last few days. What's the risk that the whole bill to yeah leave customers behind in the satisfied way and also please the government with the measures you are doing could become a bit costlier and the second question relates to this potential decision to separate the legal entities. You said whatever this morning in the press conference that there is no plan to get rid of assets. Should have read that in a way that you rule out the trucks IPO or is that a two narrow interpretation of your words? Thank you.

To start with the first part of your question, as we have announced that we are putting a service action on almost all of our weaker fleets between €5 and €6, it's difficult for me to imagine that somewhat could ask for more. Whatever will pop up in this meeting beyond that of course I cannot be a appropriate? I do believe that the people being at their table will have a common intention to come up with the results of their meeting. And therefore I hope that will be the outcome, but once again I'm in a speculative fear because I'm only one participant and there are more. Thank you.

Patrick, to your question, this morning I said that we do not intend to divest single business divisions on top of this information we do not further want to comment on the topic of this structure, which we have discussed this as if understanding we are analyzing currently and then we keep you informed about further progress.

All right. Thank you.

Thank you. The next question is from Jose Asumendi, JP Morgan.

Thank you very much. Just a couple of questions please Jose, JP Morgan. The first one for Martin; just a simple one, are you happy with the - do you think it's enough to review the fixed cost base of the truck business were around 500 million, do you plan to accelerate this measure or to revisit this plan just because of the first plants almost is the job, do you think it's enough to improve the profitability of the truck business? And the second one is for Dieter, we don't get confused, so maybe can you share with us your thought sort of how will work for Daimler to hit the mission targets by 2021 in Europe. And if you could please comment a little bit around 4G technology; how far could you roll that out across the total portfolio for the portion of hybrids as you're planning, at least from the current point of view? And also, any comments around Kamenz and the battery expansion plans, which I consider sort of a secret for Daimler? Thank you.

Okay, thanks for the question. Certainly the €500 million is one important step on the fixed cost side mainly in Europe and Latin America, but it's just one piece of a big host of efforts we are doing. We have named the total of €1.4 billion we want to improve, but that's just one stop, and rest is normal ongoing business which is exciting product, and continues improvement of the existing business, so it will never end. But the €500 million is an important, but by far not the only step.

To the other part of the question which you addressed to me, certainly the change from the current CO2 measurement through WITP in the future is not making the target any easier for anybody. So this is an additional stringency input in place with the same numbers. On that basis of course we are continuously revisiting our plans in according to our market expectations as well. And we, of course, target to accomplish these levels, and put all the efforts we know about into our planning in order to get there. So our overall business system optimization we're working on, and there certainly Leadership 2020 4.0 is part of it. Not leadership -- is clearly including these efforts which we take, and still maintaining our objective to run a very profitable core business, and to support the new business under the headline of case to come to fruition. I am not quite sure what you mean with 4G technology. In case this is the case, obviously as I said before, all the efforts into this future are included in our business planning which is midterm and long-term. When you talk specifically about autonomous driving the same applies. So we have a holistic approach to our business development, including the transformation from our current core business into the future element of case, and to make this, on the one hand, successful in the marketplace, to keep us in the number one position in this new business as well, and at the same time to delivery on an ongoing basis the levels of profitability which are supposed to satisfy your demands and our demands.

Thank you. The next question is from Harald Hendrikse, Morgan Stanley.

Yes, good afternoon guys, thanks for taking my question as well. Two questions for me again, please. Unfortunately it seems to be the two topics of the day. And on trucks I'd like to go the other way, please, rather than have the debate before. It's a long time since we talked about the truck business relative to the others. But it would seem to me that the current situation with emissions being so high on the agenda and also obviously autonomous systems being a large part of your current investment. What are the synergies between those technologies, between the two businesses? It would seem to me that those synergies today are as high as they've ever been before. And then secondly, a difficult question on diesel, but rather than balance sheet and all of these sort of things, my concern is really with the consumer reaction on diesel, and the impact of residuals on further reaction going forward. And so if you look at results today you've had very strong Mercedes results again, you've had very strong financial services results which would indicate to me that so far the residual impacts on your business have been absolutely minimal. But if we do suddenly start to see a 10% correction in diesel residuals around Europe how will you react? What does it mean for the monthly payments that you'll have to charge the customers, and how do you anticipate consumers would react once those monthly payments would have to go up? I'm sorry, that's maybe a difficult question but something concerns me very significantly.

Thank you for your questions. As far as the first point is concerned, of course, since ever we had a strong interaction in the development of our combustion engines, and benchmarking the technologies on both sides, not much is changing there. Looking forward, electric mobility again has some common denominators which we are addressing, but at the same time of course pretty different requirement as well. None of these synergies are pushed top-down, but all of them are requested bottom-up when one division sees the possibility to benefit from the activities on the other side, and that seems to be a very effective way to address these issues. And they, if that's part of your question, are pretty much independent of any leader structures within the company. When I'm looking to our diesel business within passenger cars, the fact is that we are selling today more cars with diesel engines than we did a year ago. This is a lower increase than the overall growth, so the proportion has been reduced a little bit, but this is mainly driven by the fact that the growth comes though hikes and from China, where obviously we don't sell these engines. Beyond that, we are looking at our residual developments across the board. We are following third-party observations to the same extent, and up till today we have no indication of any change of the current situation.

Okay, and thanks very much. Is it possible that you can just explain to us how proactive the company would be though in terms of protecting the balance sheet? Ford in the U.S. last year talked about reducing their overall lease exposure because of their concern on passenger car residuals. I thought that was a very intelligent way to go. Would any of the companies in Europe or yourselves consider being a little bit more proactive to protect the balance sheet going forward?

Harald, we seek to our strategic guidelines we have for our leasing penetrations in certain countries. There is no change. We have a bandwidth for leasing business in certain major countries like U.S., U.K, in Germany, and Canada. And of course we are watching this market, and it's a very balanced approach we take in leasing, also with regard to lease maturities and the respected cost of risk with regard to this business. But there's no change.

Okay, thank you very much.

Thank you. The next question is from Michael Tyndall, Citigroup.

Yes, hi there. It's Mike Tyndall from Citi. I'm going to pretty much follow on where Harald left off. Just on the diesel front in Europe, I wonder if you could give us some feel for what's happened to penetration? And in that regard, what's happened to your average CO2 in the first half of this year? It was flat year-on-year at the end of 2016. Has it improved or has it worsened? And then jumping to the lease book, just looking to your comment there, Bodo, it looks like the lease book is running growth-wise at about two times volume growth, which I presume is largely China. But I noticed that in North America the lease book was up or at least contracts were up 2% on sales, down 6%. Where are we in that corridor that you mentioned in terms of North America, because certainly from where we sit it looks like residual values are under pressure there, but you appear to be growing your exposure to that market? Thanks.

I do understand that when you follow the media you would expect our diesel penetration to show significant change. When you listen to our customer the situation is dramatically different. We have heard very little concerns for our customers as far as diesel are concerned there for a very long period of time, is changed slightly in Germany when the discussion about bans -- temporary bans for certain cities popped up, that's why we became very active in potential countermeasures. When we informed the public about our plan of a service action on almost all of our vehicles, cars extremely positive feedback from our customers and as a result of all of that, I only can repeat what I said before that we have no significant changes and take rates in the markets where we offer diesel in comparison to the time more than half years ago. Your question with regard to the U.S. and east penetration when you go back couple of fields, it's a longtime ago I think we were over about 50% in lease rates, lease penetrations. We are currently underneath 50% pretty stable over the last one-and-a-half two years. There are not financial services portfolio as such of course is growing mainly in Asia based on the growth in China we do have. There of course we have sales, huge sales increase on the one hand but also penetration increased. So that of course has a higher effect on the portfolio than in other countries and Europe is moving to based on the success specifically in terms of the cars. But overall also all the leading penetrations worldwide are pretty constant in passenger car business.

Perhaps I can add as most of our car lines -- for most of our car lines the demand exceeds our lines though we have increased the supply continuously. We are in there comfortable situation that we can not entirely but to some extent deliberately choose the channels we want to sell them and therefore there is not pressure for instance to increase the least penetration beyond what we consider strategically correct and that adds to what Bodo has said.

Brilliant. Thank you very much.

Thank you. The next question is from Martin Vika, Redburn.

Hi, this is Martin Vika from Redburn. I have two questions if I may. The first one would be on diesel euro a mission. €6 C, which is the one that enables the cars to be only 1.5 times more admitted in the real world than compared to attachment. I just wanted to have a feel of how much will it cost to retrofit your current €6 cars to be €6 C compliant? And the second question would be on the pure ED platform. For my understanding the Mercedes EQ will be manufactured alongside other Mercedes SUVs. When is Mercedes going to launch a specific pure ED platform that will be produced separately from everything else? Thank you.

To your first question, we are currently producing make of C-class and step-by-step the other generations as or the other classes as well was a newly developed so called OM654 whatever that means. What it means is that from third-party it has been kind of certified that these vehicles already meet today these kind of specifications here we are asking for. When you are talking about liberal, deliberate service action, the field for vehicles which have been sold before nobody has ever talked about receiving certain emission standard, but we are talking about improvements versus the current situation and that is especially as far as real world emissions are concerned and that's where we are foreseeing significant impact by the actions we have announced but we are not claiming to achieve any certain emission levels with five or six of - of 6C or anything like that.

Okay, and on the platform?

Yes, yes. Sorry. The second part of your question, we are developing a standalone all electrical vehicle platforms and they will be launched within up to 22 basic recovering all volume segments. We have decided to produce these vehicles within our highly flexible assembly lines. We have gained this flexibility throughout the last years and on the same assembly lines as the combustion engines. Again, this does not mean that they would derive from the same platform; it just means that it gives us all flexibility in their unpredictable, unforeseeable mix; we will have in the years to come. So I think that's a very effective measure to keep our overall system effective and efficient but it does not limit the freedom of development for perfect purpose built and developed batter electric vehicles.

Thank you very much.

Thank you. The next question is from Stephen Reitman, Societe Generale.

Hi, yes good afternoon. Thank you Steve Reitman, Societe Generale, London. I have two questions. Well first on diesel, the service action that you've announced the that we called up to 3 million vehicles. Can you give some order of magnitude of what improvement will be achieved with these software updates and secondly it seems that you've also talked about the acceleration the introduction of the 654 engine, is that actually correct? Have you increased the accelerate the fact of introduction of this engine and does that mean that you will be maybe comparing some of the existing diesel engines, which maybe longer life and where you originally planned? And secondly, on China you talked about China being certainly chargeable growth and then with your growth that is very spectacular. Where are we now in terms of the capacity, in terms of your ability still to keep growing there or when do you actually have to start thinking again about further capacity, first plants? Thank you.

Thank you. To your first part of your question, first of all, we are talking about a service action and not about the recall. We are in the final stage of calculating ourselves the percentage of improvement we will accomplish in average for the 3 million. It will be significant and it will be for sure, they are significantly higher than as impact in the cities where these vehicles will circulate. Then the reduction of NOX, which could be accomplished by bands to the cities that is absolutely sure and once again it will be a very significant two digit passenger reduction for these vehicles most specific we will become the moment we know ourselves. As far as 654 engine is concerned, this is a new generation and like in any tough situation you use other events in the different vehicles like facelifts and so on for a rollout to ultimately penetrate your overall portfolio with the new engine generation. We have that plan and nothing has been change to that plan and therefore no impact on the amortization of former engines in the center of their any special actions being requested there. China, we are continuously increasing the capacity in China; first of all, technically but technically as well as far as we can leverage the existing capacity by significant gains in productivity. If you look to our numbers you will see that the growth in China for relatively longtime has been accomplished with that account. So which provided growth number is not a given term. So we are very successful there and therefore once again we are continuously increasing the capacity but nothing spectacular is in the planet right now.

Thank you.

Thank you. The next question is from Horst Schneider, HSBC.

Yes, good afternoon and thanks for taking also my questions. And first of all my question is regarding sales pattern of Mercedes cars for the second half. I mean, it was great performance in H1. I see that the comparison based from last year is getting higher, so would you agree that the unit sales including China as well would increase only anymore slightly in H2, which still makes it on a 40 basis of significant increase and in that context also you confirm that the pricing is still improving and the second question that I have it's unfortunately on the proceedings but it's more question on the interim report on Page 44 you will list all the proceedings but you don't list the nominee claims especially regarding E-Class action lawsuits. Could you quantify them please? Thank you.

First part of your question, we have a very strong momentum in many markets almost all markets of the growth. We do not see a change of this momentum going forward. On the other hand, the performance in the quarter last year was different from quarter-to-quarter so in year-over-year comparisons you have the base effect which might led to different percentages from quarter-to-quarter but overall our guidance for the volume development for this year is absolutely intact and this anything was in the year our momentum has been rather growing versus our original expectation than the opposite. This is accompanied by a pricing which continues to be positive which again indicates that our growth is fueled and driven by customer demand and not by any actions which would be contrary to possibility objectives.

Okay. Björn Scheib: Harald, thank you for your question but please ask [indiscernible] do no comment on further details on the interim report.

Okay. Thank you. Björn Scheib: Thank you.

Thank you. The next question is from Christian Ludwig, Bankhaus Lampe.

Yes, good afternoon. Christian Ludwig, Bankhaus Lampe. Two question from my side. One just the clarification, Mr. Dieter Zetsche tell me correctly that you want to have a level V autonomous car on the road in three to four years, is this going to be available for the consumer or that's going to be a prototype. And secondly on China, you set a very strong at equity result after half year. Is the run rate let's say at least 150 million net result for a quarter or something that you think is going to continue going forward. Thank you.

Regarding your first quarter - the answer is not as simple as typically would not expect the consumer going to a sales room asking for Level V autonomous car and then sits in the back row and waits with strive. But that you're talking about kind of robot taxi which obviously is part of the system providing this kind of service. And if you want to call that the customer or not is the question. Their ideas, their intention is to have these products be ready assuming that the legal environment is allowing to do so for public use under certain conditions in certain areas. That is the first step we're shooting for and we feel goods in accomplishing this plan and feel good about our competitive position in this regard.

To your question on the China business specifically BBAC we are very happy with the development in terms of gross in sales and in revenues and in profitability. We assume for the second half again a goods development but we do not comment on specific numbers, please understand.

But there is no reason to expect. We are seeing a significant decline I understood you expect the trend to continue correct?

We expect a very good business in China.

Okay. Thank you.

Thank you. The next question is from Stuart Pearson from Exane BNP Paribas.

Good afternoon. A couple of questions, I guess one on the power train side, I guess by the sound of it, we agree we are selling less diesel at some point in not-too-distant future but I guess that demand has to go some way. So I wonder if we just talk a little bit about the economics on plug-in hybrids because I guess you are starting to see a reasonable volume of that now and a big hybrid player also being Toyota claim to make more money on hybrids than they do in gasoline. So I was wondering if you could share your experiences from pricing you're achieving on the hybrids and where do you expect the profitability of those models to be says versus gasoline in two or three years time based on what you know today. And then secondly, an apologies if I missed this. Just quickly the FX side and a little bit surprise to see, it looks like we'll be looking ahead wins already in each, so just maybe a little bit of elaboration on where they are coming from and how far you've locked in hedge rates in 2018 and 2019 and is it fair to assume the FX gains that we're seeing this year were pretty much the fully reveres in 2018. Thank you.

As you're rightfully already put into your question the developments on black and hybrids in first place you're talking about here, is the fluid one. On the one hand technology advances which allows us first to improve the cost position and secondly to improve the performance of these vehicle. The later one leading too more chances for pricing and therefore the overall situation for black ends will improve overtime. At the current stage, even though would not give you any specifics, I would go so far that the statements which you quote from Toyota would not applicable - would not be applicable to us at that point of time but once again going forward the economic effect of them back and hybrids will improve and of course in the end it's a competitive matter between demand and supply how the pricing for this and for other CO2 related measures that will develop of course our intention is to have a pricing reflecting the content we put into our vehicles for the parts of our vehicles in the future as well.

With regard to your question, with regard to foreign exchange for this year we are pretty much hedged of course for the matured market specifically the U.S. it's 90%. For 2018 of course we have a general conservative hedge to three years rolling forward so it will be pretty much hedges in the 2018 to 2019 but less than the 90% but it's too early to discuss the volatility we do this in February 2018 or later in the year to give you more precise guidance for the year 2018. Currently of course the strengthening of the Euro we have to see what kind of trend it is so any speculation on 2018 is too early.

Thank you. The next question is from Richard Hilgert at Morningstar.

Thank you. Thanks for taking my questions. On the segment level, looking at - there was nice increase in revenues over volume for the car group but for trucks, vans and buses there was significantly higher volume increases versus the level of increase in revenue and I was wondering if you could talk a little bit about that, is that a pricing issue is that a currency issue or is there something else going on with respect to mix or what specifically is the reason for that. And then the second question also related to the groups; again nice margin for the Mercedes-Benz car group versus the prior year but again more degradation on the truck side. So similar question there for the margins as well.

Before I would hand over to Martin to answer these questions, let me just make one comment on the van business. You have seen now the impact of the ending of contract of supplying the vehicles Volkswagen which obviously has an impact on revenues and therefore these earnings - and therefore these two elements are not comparable. We did not report the focus Volkswagen deliveries as unit sold but the contributed obviously to our profits and therefore in this case is a very complex mention by that fact. We actually have -- as far as revenues are concerned we were able to basically compensate for that loss if you want in revenues and this is certainly lots of satisfying results but now I would like to hand over to Martin as far as trucks and buses are concerned.

As far as trucks and busses are concerned is mainly a structural impact because we look here on a year-over-year basis. The market was the biggest increases in Indonesia where we have a significant market share, but it's a fairly light-duty heavy market, while the biggest decrease we have in the North American heavy-duty market year-over-year, so here we shift from heavy-duty to light-duty structure this year, which can -- will be diverse than the more traditional heavy-duty markets we are going. So that's some years back, start telling back.

Okay, thank you very much. Björn Scheib: So, ladies and gentlemen, thank you very much for your questions, and coping with us today. Thank you very much also to the Daimler management team for answering all of your questions. As a friendly reminder, please keep in mind that we are going to host a Capital Markets Day for the Mercedes-Benz passenger cars on the 11th of September here in Stuttgart, and on the evening before Martin Daum has got a host of dinner for all the ones of you who are going to be present here in Stuttgart. In case, you want to join, please register as soon as possible, because as always the amount of seats is going to be limited. Now, Investor Relations remains at your disposal to answer any left off further questions that you may have, and thank you very much all for listening all from the Internet and on the phone. Have a great afternoon, great good morning, or great evening, and we look forward to see you all soon.

Ladies and gentlemen, this conference has been concluded. You may disconnect.