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Thursday, April 10, 2008

Speech by Dr. Dieter Zetsche, Chairman of the Board of Management, at the Annual Meeting 2008 of Daimler AG

<< I.
Dear shareholders, shareholder representatives, ladies and gentlemen,

On behalf of the Board of Management and your company�s employees, I welcome you to the
2008 Annual Meeting � the first to be held under our new name!
It has now been eight months since we sold a majority interest in Chrysler.
Six months ago, at our Extraordinary Shareholders� Meeting we decided to rename our
company �Daimler.� Almost two months ago, we presented our figures for 2007.
And the positive response confirms that Daimler is off to a good start.
Today, I�d like to review our present situation and take a look at the future.
In particular, I�ll focus on three questions:
- First: Where do we stand today?
- Second: What future targets are we setting for ourselves?
- And third: How do we plan to reach these targets?
First of all, where do we stand today?
The answer is that we stand on a strong foundation, which will support much more positive
development.
All of our business operations are developing in the right direction � our key figures are
significantly better than they�ve been in recent years.
At Mercedes-Benz Cars, we sold more vehicles in 2007 than ever before. We also expanded
our market presence while significantly improving our return on sales.
In spite of downturns in some markets, our Daimler Trucks division was profitable across the
board. Its overall earnings were better than ever before.
Mercedes-Benz Vans set a new sales record.
Daimler Buses remains the global market leader.
And, in spite of the separation from Chrysler Financial, Daimler Financial Services posted a
return on equity of 14.8 percent.
At the Group level, our total revenue in 2007 was 99.4 billion euros.
Our operating profit of 8.7 billion euros was significantly higher than in the prior year and also
exceeded our EBIT target.
Despite the financial burdens connected with the demerger from Chrysler, our net profit was
higher than in 2006. This shows just how much progress we�ve made.
Our value added doubled to 1.4 billion euros. That corresponds to a return on net assets of
more than 10 percent. In other words, we�ve clearly exceeded our minimum required rate of
return of 7 percent. We are creating value.

Our long-term credit rating has also developed positively. That�s yet another indicator of our
improved risk profile, our increased profitability, and our solid financial structure.
Of course, you, our shareholders, should benefit in particular from all these successes.
That�s why we would like to increase the dividend by one-third: the Board of Management and
the Supervisory Board recommend to the Annual Meeting that Daimler pay a dividend of
2 euros per share.
During 2007, the price of Daimler�s shares increased by 42 percent, clearly outperforming
both the German DAX index and the European automotive sector.
However, it�s also true that many investors� confidence has been shaken by the financial
crisis in the United States and that our shares have not been able to buck the generally
negative stock market trend in 2008. But we�ll be doing everything in our power to change
that.
At our Annual Meeting last year, you authorized us to acquire almost 10 percent of our
outstanding shares. We have taken advantage of this opportunity.
Today we are asking the Annual Meeting for authorization to make additional share buybacks.
In this way, we are further demonstrating our confidence in your company�s future prospects.
In summary, we can say that 2007 was a groundbreaking and successful year. We will
continue to work hard to ensure that Daimler becomes synonymous with top performance on
a permanent basis � and we�ve defined clear growth strategies for all of our business
operations.
Let me explain what this means in detail.
II.
I�d like to begin with Mercedes-Benz Cars. Whether we look at unit sales, revenue or earnings,
2007 was an outstanding year for Mercedes-Benz Cars.
We set a new record for unit sales: Last year, 1.29 million customers bought a Mercedes-
Benz, smart or Maybach vehicle. All of our production plants are working at full capacity.
This positive development continued in the first three months of 2008. Despite facing difficult
market conditions in some cases, we boosted our unit sales by 11 percent and sold more
vehicles than ever before in any first quarter.
Our revenue rose to more than 52 billion euros last year � largely due to the success of our
new C-Class, which we launched on the market at the end of March 2007.
More importantly, Mercedes-Benz Cars also significantly increased its earnings last year. With
a 9.1 percent return on sales, we exceeded our target of 7 percent by a substantial margin.
This means that in 2007 we were more profitable than in any of the previous 20 years.

This achievement is first and foremost thanks to the success of our products. In fact, the
brand with the star received no less than 19 awards in 2007:
According to the German automotive association ADAC, the new C-Class sedan is �the most
popular car in Germany.�
In a reader survey conducted by the Auto Motor und Sport magazine, our S-Class was once
again voted the �best automobile� in the luxury class.
And a European jury of experts convened by the Auto Bild magazine unanimously agreed that
our SLR is Europe�s best roadster.
We�re also delighted by the developments at smart: the new fortwo, which we�ve steadfastly
supported despite some negative comments, is fast becoming a hit in major U.S. cities.
The response has been very good � not just in America but also here in Europe.
In fact, just eight days ago we handed over the keys to the 100,000th new fortwo to a
customer in Munich.
In 2007 as a whole, the smart fortwo also slightly topped the prior year�s sales figure. And the
better news is that we were in the black, as promised.
Overall, the smart is ideally equipped to meet today�s challenges. No other series-produced
car in the world can match its ability to combine lifestyle values and utility with environmental
friendliness and economy. The diesel-powered model is the undisputed �CO2 Champion� � in
other words, it emits less carbon dioxide than any other series-produced passenger car.
I�m convinced that if the smart didn�t already exist, many people would demand the
introduction of just such a car. So, sticking to our guns was obviously the right thing to do.
Ladies and gentlemen, Mercedes-Benz Cars will unveil a whole range of innovations
throughout 2008.
At the auto show in Detroit last January, we presented the new generation of the SLK as well
as our new compact SUV, the Vision GLK, which you can see here in front of me.
In Berlin, at the end of January we unveiled our new CLC coupe during the Mercedes-Benz
Fashion Week.
At the Geneva Motor Show in March, we showcased innovations in eight model series,
including: the new generation of our iconic roadster, the SL, the 4MATIC version of our luxury
coupe, the CL, and two especially efficient C-Class models.
At the New York auto show less than three weeks ago, we presented the new generation of
the M-Class alongside many other innovations.
And, at the AMI Motor Show in Leipzig this week, we are showing a more dynamic and more
environmentally friendly generation of the new A- and B-Class. The new features on display
include an automatic start-stop function.

Each of these vehicles combines fascination and responsibility. Under the banner of
�TrueBlueSolutions� we have three especially green concepts: BlueEFFICIENCY, BlueTEC, and
BlueHYBRID.
Under the BlueEFFICIENCY label, we�ve combined intelligent measures that make our current
models more fuel efficient. This year we�ll start the rollout of 20 BlueEFFICIENCY models that
will make it possible to reduce fuel consumption by up to 12 percent in daily operation.
BlueTEC stands for the world�s cleanest diesels. BlueTEC has already been in the U.S. since
2006 in the E-Class sedan. This year we�ll launch BlueTEC in three SUVs in the U.S. market �
the M-Class, the GL, and the R-Class.
With our BlueTEC vehicles, we will become the first automaker to offer our U.S. customers
SUVs that comply with stringent California emissions regulations and have been approved for
sale in all 50 states.
These models also have the potential to comply with the future Euro 6 limits. What�s more,
with the introduction of the E 300 BlueTEC, this technology has been available in Europe
since 2007.
We will introduce our BlueHYBRID technology on the market in the S- and M-Class as early as
2009. The S 400 BlueHYBRID will be the world�s most fuel-efficient luxury sedan � regardless
of whether our rivals compete for this title with gasoline, diesel or their own hybrid-powered
models. It will consume just 7.9 liters of fuel per 100 kilometers. And our customers can have
similarly high expectations of our ML 450 BlueHYBRID.
Each of these vehicles deserves to be called a premium vehicle for many reasons besides its
environmental friendliness. Altogether, we�ve defined six �specialty disciplines� in which we
aim to be a front runner: quality, safety, comfort, design, environmental friendliness, and, last
but not least, customer satisfaction with our sales and service.
Thanks to our �CSI No. 1� offensive, we�re already among the top 10 in terms of customer
satisfaction in almost all of the major markets. In some cases we�re even among the leaders.
But that�s still not good enough for Mercedes-Benz Cars: we aim to be in the pole position by
2010. Supporting that claim is an article that will run in AutoBild the day after tomorrow. Our
Mercedes service facilities and dealers achieved the best rating in the 22-year history of this
test! That shows that good service pays off. And it�s why we continue to push for progress.
Ladies and gentlemen, if you look at current developments in the automotive industry, you�ll
see that some of our competitors are only now starting programs similar to those we
launched a few years ago as part of CORE.
However, we can�t afford to become complacent. On the contrary, we�re ready for action �
and will remain so.
That�s why we want to make further improvements in efficiency and quality. Last year, we
boosted productivity by 10 percent. In the next few years, we aim to raise it by an additional
10 to 15 percent, depending on the model series.

To further boost our efficiency, we will continue to pursue a modular strategy at Mercedes-
Benz Cars. In other words, wherever costly unique components don�t provide our customers
with tangible added value, we will consistently standardize them.
For example, we will significantly increase the number of shared parts that can be used in
more than one model series. By doing so, we�ll reduce our costs and enhance quality,
because we�ll be relying on tested and proven solutions. The developments over the past
three years confirm that our modular strategy is bearing fruit.
The number of customer complaints has halved since 2004. And the last J.D. Power quality
survey put Mercedes-Benz in fifth place � 20 places higher than in 2006. We are currently
combining our various programs and initiatives at Mercedes-Benz Cars to ensure that the
individual measures mesh as effectively as possible. These include:
- the excellence process we�ve launched for the entire Group,
- our more sharply focused brand positioning,
- the product and regional strategies,
- our customer satisfaction offensive,
- the continuation of our quality and efficiency-boosting measures, and
- our �TrueBlueSolutions� for sustainable mobility.
To sum up, Mercedes-Benz Cars is well on its way to achieving top form. And let me assure
you, we will continue to step on the gas.
III.
Now let�s turn to Daimler Trucks. Last year, our Global Excellence strategy was really put to
the test when two of our key markets dramatically contracted. In concrete numbers, the
Japanese market shrank by 25 percent and the North American market by 32 percent. In the
U.S., our key segment of Class 8 heavy-duty trucks actually plummeted by 40 percent.
As expected, unit sales and revenue were therefore lower than in the previous year.
Our financial results were still excellent, however, with EBIT climbing to an all-time high of
2.1 billion euros. In addition, we substantially increased our return on sales by 1.7 percentage
points, to 7.5 percent.
In other words, we passed the test.
One reason for our success was the outstanding business results achieved by Mercedes-Benz
Trucks in Europe and Latin America, as well as in the emerging markets.
Another was our Global Excellence program. With this initiative, we are pursuing four goals:
- stability, despite market fluctuations;
- efficiency;
- growth; and
- technological leadership.
Although we are working hard to achieve all these goals, our focus so far has mainly been on
the first two: stability and efficiency.

We�ve made our organization more flexible and systematically standardized our products and
processes. A good example of this is our Heavy Duty Engine Platform, which replaces four
engine families. Altogether, 90 percent of the parts in this new family are common.
As we enter the second phase of Global Excellence, we are increasingly focusing on new
markets and products.
And our efforts are already bearing fruit.
Mercedes-Benz Trucks is now also the market leader in Eastern Europe, where our operations
expanded by 20 percent in 2007 alone.
Fuso was able to compensate for the downturn in Japan, its domestic market, thanks to
successful sales abroad. For example, in 2007 we boosted unit sales by 42 percent in
Indonesia, Fuso�s most important export market � where we are clearly the market leader.
And South America is the most important growth market for our Freightliner, Western Star,
and Sterling brands.
All in all, Daimler Trucks is not only the global market leader by a long way, but is also very
well positioned with its five brands.
That�s one of the reasons why we can calmly react to the acquisition activities of our
European competitors. We are, however, closely monitoring these developments.
Another reason for our confidence is the strength of our product range, which we rounded off
even further in 2007 with the Freightliner Cascadia, the compact Unimog U 20, and the new
Fuso Super Great � the vehicle with the lowest emissions in its class.
The most important new product this year is the new Mercedes-Benz Actros, our flagship in
the heavy-duty truck segment.
Its predecessor model was the undisputed number one in its segment � not only in terms of
unit sales, but also in relation to quality, value retention and, thanks to our BlueTec
technology, fuel efficiency and clean operation. We�re convinced that our new truck is as
good as its predecessor, if not better, in all of these categories.
There are already more than 140,000 environmentally friendly Mercedes-Benz BlueTec trucks
on the road in Europe.
And this year, with the Fuso Canter Eco Hybrid and the Mercedes-Benz Atego BlueTec Hybrid,
we�ve also delivered our first hybrid trucks to customers in Europe. In other words, we�re
playing a leading role here as well.
As you can see, we�re not just talking about efficient and clean trucks � we�re building them.
Equally important, our customers are rewarding us for doing so. But they obviously buy our
products because they also benefit in many ways. The advantages can be summed up in four
terms: efficiency, reliability, safety, and environmental friendliness.

In the truck business as elsewhere, first-class products are important, but they must be
complemented by first-class service. That�s the only way to keep customers satisfied in the
long term.
Accordingly, with our Truck Dedication initiative, we are aligning our range of after sales
services more closely with the needs of Mercedes-Benz Trucks customers.
For the trucks with the star, we offer a �five-star� service:
- with easily accessible service centers that are located near highways,
- and with weekend service that�s precisely tailored to the needs of our truck customers.
The overall outlook for Daimler Trucks is positive.
And this is also affecting the numbers of our workforce: In 2007 and 2008 we�ll create more
than 1,300 jobs in Germany. In this year alone we�ll invest about 150 million euros to expand
our truck production plants in Germany.
In short, our trucks are on the right track.
IV.
And I�m delighted that we can say the same about Mercedes-Benz-Vans. Sales reached an alltime
high in 2007, primarily due to the Sprinter�s success. But sales of our Vito and Viano
models also substantially increased.
In the U.S., last year�s launch of the new Sprinter under the Dodge and Freightliner
nameplates was a big success. And in Germany, we handed over the first Sprinter with clean
natural-gas drive in March this year.
We continue to be the world leader in the bus sector. Very positive developments in Latin
America last year more than offset downturns in several core markets. In fact, we now supply
almost half of the buses in the region.
Our bus lineup also includes many new products. Those introduced in 2007 included: the
CapaCity regular-service bus; the Conecto intercity bus; and the Orion VII hybrid urban bus.
This year�s most important new product is the Setra TopClass 400.
Incidentally, New York City alone recently ordered an additional 850 Orion hybrid buses,
thereby almost doubling the number of these vehicles in its fleet.
Beginning in 2010, almost half of the buses operated by the New York Metropolitan Transit
Authority will be Daimler vehicles. What�s more, we will supply all of the city�s hybrid buses.
That might also serve as a good model for other cities and municipalities � possibly even here
in Germany�
V.
Now, let�s turn to Daimler Financial Services. Here, last year�s main event was the separation
from the Chrysler financial services business.

Nevertheless, our contract volume rose by 9 percent when adjusted for exchange-rate
effects. What�s more, our 14.8 percent return on equity was significantly above our 14
percent target.
We�ve also made significant progress toward achieving our goal of having the most satisfied
dealers and customers:
According to J.D. Power, we now have the highest satisfaction rating in the U.S.
In addition, we are among the top ranked companies in this field in many other markets.
This year Mercedes-Benz CharterWay was voted �Best Brand� in the commercial vehicle
rental and leasing category for the third time.
To enable us to better exploit the potential of our automobile-related financial services, we
will expand our global presence and services in step with the vehicle business.
At the same time, we are striving to further standardize our system architecture and the basic
building blocks of our services.
Our aim is to create a complete and compelling value chain, extending from the first contact
with a customer interested in vehicle financing or insurance to the conclusion of the contract.
All of these measures will ensure that Daimler Financial Services remains what it has been for
many years: a key pillar supporting the sales of our vehicle brands, an effective tool for
promoting customer loyalty, and, last but not least, an important contributor to Group
earnings.
VI.
Ladies and gentlemen, with regard to our holdings in EADS and Chrysler, I�ll be brief.
Our involvement in EADS is nearly unchanged since our last Annual Meeting. As of mid-year
2010, we can reduce our stake in the company to 15 percent. We intend to continue to be a
strong and reliable partner.
As you know, we still own 19.9 percent of Chrysler. And despite the demerger, we continue to
cooperate on projects that are beneficial to both companies.
These include:
- supplying diesel engines from Berlin-Marienfelde for the Jeep Grand Cherokee;
- the hybrid joint venture with GM and BMW;
- the sales partnership for Dodge and Freightliner Sprinters in the U.S. and Canada,
- and our cooperative efforts in Financial Services in international markets.
We are monitoring the progress of these projects in the Joint Cooperation Board, which meets
regularly. Our relationship is constructive and cooperative.
And it goes without saying that we wish our colleagues at Chrysler good luck and much
success in the world�s most hotly contested market.

VII.
Ladies and gentlemen, you can read the details of the Group�s Management Report in our
2007 Annual Report. Our staff will gladly provide you with a copy if you need one.
The report�s key message can be easily summed up: Your company has made substantial
progress over the past two years.
- We have worked hard to reach our targets and defined clear strategies for all of our
business areas.
- Our brands and products are in demand.
- Our quality level is back where it should be.
- Customer satisfaction is steadily increasing.
- We have become more efficient and profitable overall.
- And throughout all of our units and functions, we are united by our pursuit of the same goal:
top performance.
To put it another way, old virtues have given us new strength.
Nevertheless, there�s still room for improvement. Our basic structure is strong � and we aim
to build on it in the years to come.
And that leads me to our second key question: What future targets are we setting for
ourselves?
VIII.
Our fundamental goal can be summed up in one sentence: We invented the automobile � and
we are passionately shaping its future.
On the one hand, the world is embarking on a second �automotive century.� The number of
automobiles in the world is growing five times faster than its population.
On the other hand, in the long term this increase will only be ecologically acceptable if we
continue to make passenger cars and commercial vehicles cleaner.
This is a perfect challenge for Daimler:
- We invented the automobile, the truck, and the bus.
- Customers expect us to provide solutions � and we are willing to accept a pioneering role
when it comes to clean and safe automobiles.
- Most importantly, we have the necessary innovative power and the financial means to meet
this challenge.
In 2007, we invested 4.1 billion euros in research and development and 1.8 billion euros in
environmental protection.
In the coming years we�ll increase these budgets even more, and by 2010 we�ll invest almost
14 billion euros in research and development.
These efforts are all the more important because there is no single technology that�s clearly
superior to all of the others. There are several routes to the mobility of tomorrow.

Our �roadmap for sustainable mobility� therefore consists of three pillars: the ongoing
optimization of our vehicles with internal combustion engines; the additional improvement of
efficiency through hybridization � in other words, the combination of a combustion engine
with an electric motor; and, of course, zero-emission driving with fuel cells and battery-driven
systems.
What�s more, we ask ourselves where the energy for future mobility will come from?
On one hand, it�s about developing cleaner fuels for combustion engines, such as secondgeneration
biofuels.
On the other hand, it�s about getting the energy for emission-free driving, such as hydrogen or
electricity, from renewable energy sources.
All of this shows that we are determined to be the driving force behind sustainable mobility.
This is one of our most important goals.
But it�s equally clear that we won�t be changing our strategy and building only small cars from
now on. Our route to sustainable mobility is based on technological innovations, not
renunciation.
To give you a concrete example, we aim to offer at least one model in each of the Mercedes-
Benz core model series that is a leader in fuel consumption and low emissions.
In 2010, we aim to launch the next generation of fuel cell drive systems with substantially
enhanced qualities in a low-volume B-Class series.
The subject of emissions is nothing new, nor is it limited to C02. That�s why we�ve focused
our work for years to reduce all emissions. Innovation and technology are important
contributors to our efforts.
In addition to zero-emission driving, we�re also continuing to pursue our goal of accident-free
driving.
Whether it�s ABS, airbags or occupant safety cells � all of these innovations are milestones in
the history of automotive safety. And all of these innovations appeared first at Mercedes-
Benz.
We aim to underscore this pioneering role in the future by coming up with further trendsetting
ideas for greater safety.
To sum up, we want to be the company that enables its customers to enjoy driving with a
completely clear conscience:
- with clean, safe, and fascinating premium passenger cars;
- with efficient and environmentally friendly commercial vehicles;
- and with outstanding services related to these products.
On this basis, we strive to achieve sustainable growth and to become one of the most
profitable companies in our industry.

IX.
So, what does all of this mean in terms of our business expectations for 2008 and beyond?
The current economic climate suggests that things will get tougher rather than easier.
In particular, the mortgage lending crisis in the U.S. has generated substantial turbulence in
capital markets.
Moreover, stabilization measures taken by the U.S. Federal Reserve have led to a further
depreciation of the dollar against the euro. In general, the economic climate in the U.S. has
become somewhat gloomy � and this is having an impact around the globe.
Automotive markets will not remain unaffected by these developments. The demand for
passenger vehicles in the U.S., for example, is likely to be much lower this year than it was in
2007, while demand in Western Europe is expected to remain flat.
Growth in our industry will continue to be driven by the emerging markets, whose expansion
is so dynamic that it more than offsets the triad market�s weaknesses. With that in mind, we
expect the global passenger car market to grow by approximately 2 percent in 2008.
As far as commercial vehicle markets are concerned, we expect Europe to maintain last
year�s high sales level. However, the North American commercial vehicle market is unlikely to
recover before the second half of the year.
So, ladies and gentlemen, what does this mean for your company?
The economic slowdown will primarily impact the volume segment for passenger vehicles.
The premium segment � our segment � is generally more stable, especially in the U.S.
Daimler has secured approximately 80 percent of its business volume against exchange-rate
risks for 2008 and we�re already more than 40 percent secured for 2009.
The crisis has not affected our funding for two key reasons: we aren�t involved in the
subprime lending business, and thanks to our high level of gross liquidity, we currently don�t
need to raise capital on the market.
In other words, we�re well equipped to successfully handle the current macroeconomic
challenges.
Our goals are therefore ambitious � but nevertheless realistic:
At Mercedes-Benz Cars, we plan to further increase unit sales in 2008, and thus to surpass
the prior year�s record level. We also expect EBIT to rise. And starting in 2010, we�re targeting
an average return on sales of 10 percent.
At Daimler Trucks, we expect the cyclical sales decline of 2007 to be followed by an increase
in unit sales this year. We also anticipate a further rise in earnings at the division, and plan to
post an average return on sales of 8 percent beginning in 2010 � regardless of cyclical ups
and downs.

Mercedes-Benz Vans expects sales to rise again in 2008. Profitability is expected to increase
again as well in the coming years.
Daimler Buses will retain its global leadership in the segment for buses over eight tons gross
vehicle weight by offering innovative product concepts. We also expect the unit�s earnings to
remain at a high level.
Overall, we aim to achieve an average return on sales in our automotive business of 9 percent
across all market and product cycles beginning in 2010.
We expect Daimler Financial Services� global contract volume to continue to increase in
2008, and aim to achieve a return on equity of at least 14 percent this year and beyond.
At the Group level, we expect unit sales to increase further in 2008. EBIT from the operating
business this year is expected to be significantly higher than in 2007.
Earnings in the previous year included several one-time effects, most notably substantial
earnings from the transfer of EADS shares. However, we also incurred charges related to
Chrysler and the implementation of the New Management Model.
Ladies and gentlemen, our goals are undoubtedly ambitious.
But so are we � and we have an excellent foundation for achieving further growth.
I would now like to turn to the four main strategic components that will enable us to attain
sustained and profitable growth � and thus to become a frontrunner in our industry.
X.
The first component for achieving our objectives won�t surprise anyone: fascinating brands
and compelling products, whose appeal � both rational and emotional � remains the key to
our success.
I�ve already outlined what we have to offer here, and I assure you that we will do everything in
our power to further strengthen our brands, sharpen their profiles, and fulfill all our brand
pledges with appropriate products.
XI.
Our second strategic component is operational excellence � in other words, the constant
improvement of processes, structures, quality, and costs. By its very nature, such an
endeavor cannot rely on a single temporary �program,� but instead must be an ongoing
mission.
We have therefore launched a Group-wide �Process of Excellence� initiative, which is based
on our four corporate values of passion, respect, integrity, and discipline. The aim is to
establish a �High Performance Culture.� Such a culture is defined by:
the attitude that �good is never good enough;� a willingness to learn from the best so that we
can attain benchmark status; a commitment to binding targets that we�ll use to measure our
performance; and the understanding that we hold ourselves to the highest ethical standards.

Our employees know that we place great value on the strict adherence to all legal regulations
and internal rules. We�ve recently expanded our �Corporate Compliance� department, the
head of which reports directly to me.
The issue of culture is crucial here, since ultimately it�s our people who set us apart from our
competitors � they make the difference.
Naturally, our employees benefit when our business flourishes. We reward them accordingly
through our profit-sharing program, which paid out 3,750 euros to all eligible Daimler
employees in 2007. This was nearly twice as much as in 2006, and almost four times the
amount paid out in 2005. Our profit sharing program thus demonstrates that performance
pays.
Over the last few months, we have also opened childcare centers at our plants in Stuttgart-
Untert�rkheim, Sindelfingen, Bremen, and W�rth.
Additional daycare centers will follow by the end of the year. Originally we�d planned for a
total capacity of 350 children, but due to the enormous demand we want to raise that
number higher still.
With these centers, we are not only helping our employees to better combine career and
family, but also making our company more attractive to highly skilled workers. As you can
see, business objectives and social responsibility are not mutually exclusive.
In this context, I would like to emphasize the importance of the current public discussion on
�business and morality.� I firmly believe that companies have a responsibility to society at
large.
This responsibility also compels public corporations to fully exploit earnings opportunities.
Only profitable companies can offer long-term employment.
Only profitable companies can pay good wages.
And only profitable companies can generate the tax revenues that financially support social
programs.
Competitiveness is therefore a prerequisite for corporations to meet the demands of their
customers, employees, and shareholders, and concurrently making a substantial contribution
to the welfare of society.
Ethical behavior must therefore support economic logic, not undermine it. This is one of our
guiding principles.
Some 40 percent of all trainees in the German automotive industry work at Daimler. In 2007,
we once again trained more young people than we actually needed at the company in order to
facilitate their entry into the job market.
However, we know that our social responsibility extends beyond training � and we act
accordingly. For example, we support numerous initiatives in education, science, and culture.

All of this illustrates that, in addition to making fascinating automobiles, we are also a good
corporate citizen.
XII.
The third component of our strategy for achieving profitable growth is the expansion of our
core business activities in emerging markets.
The so-called BRIC countries alone � in other words, Brazil, Russia, India, and China � now
account for 20 percent of all new passenger car registrations worldwide.
In fact, nearly all growth in our industry is currently generated by emerging markets � and we
aim to be part of it. Our chances of achieving this objective are good.
For example, although we aren�t one of the largest foreign vehicle manufacturers in China,
we�re clearly one of the most successful. China is already a major market for the S-Class,
which enjoys one of the highest profit margins at our company.
The Chinese passenger car market grew by about 25 percent last year. Mercedes-Benz
increased its sales by 64 percent in the same period and thus expanded almost two�and-onehalf
times as fast.
The brand with the star also outperformed all other premium brands in Russia, where it
posted a 61 percent sales increase. Growth in India was over 17 percent.
Our truck sales in the BRIC countries rose by 29 percent in 2007.
However, to fully exploit the potential of these new markets, we need a local presence.
To this end, all of our divisions are therefore either examining or implementing appropriate
measures.
We have been active in Brazil for more than half a century; Sao Paulo was actually our first
manufacturing location abroad. Our Juiz de Fora plant has been building Mercedes-Benz
passenger cars since 1999, and currently produces the CLC.
In Russia, we�re exploring the possibility of establishing our own truck production facility.
And thanks to our Financial Services division, we have become the first foreign automaker in
Russia with its own bank and leasing company.
Mercedes-Benz Cars has operated its own production facilities in India for quite some time.
Just two weeks ago, we received approval for a joint venture between Daimler Trucks and the
Hero Group.
Bus production operations will also soon commence in India, where we�ve teamed up with
Sutlej Motors to build Mercedes-Benz luxury buses.
We�re expanding our activities in China as well. We have been assembling E -Class cars near
Beijing since 2006, and we began assembling C-Class cars at the beginning of this year.
Daimler Trucks is negotiating a cooperative effort with Foton. In addition, starting in mid-
2009, we will begin building the Vito, Viano and, later the Sprinter, at a facility in Fuzhou. We
were licensed to do so in 2007.

All of this demonstrates that the BRIC countries are booming � and we are part of the action.
In this context, I would like to make an important point: growth in the BRIC countries doesn�t
threaten our production locations in Germany. On the contrary, it offers them opportunities.
After all, by expanding our production and assembly capacities in the emerging markets we
are safeguarding jobs here.
Let me give you an example of how this works. As part of our plan to extend our model range
in the A- and B-Class segment, we�re currently examining the possibility of creating additional
capacity in Eastern Europe.
Such a step will improve our profitability and thus protect jobs at the Rastatt plant, which is
an important part of our global production network and will remain so.
XIII.
In addition to promoting growth in our core business areas, we are also further developing
innovative technologies and services. This is our fourth strategic component.
A lot of potential remains to be tapped in our downstream business � in other words, in our
sales business, aftersales, and financial services.
Today we either finance or lease one out of every three vehicles we build worldwide. If, for
example, we can also convince customers to take out an insurance policy that links them to
one of our service centers, all necessary maintenance and repairs related to a claim will be
carried out by one of our authorized partners.
Our dealership partners will receive more business as a result, and our revenue from
replacement parts will increase.
In general, we plan to supplement our existing service portfolio with intelligent mobilityrelated
products and services.
We�re also enhancing our expertise upstream in the value chain. Good examples of this
include our fuel cell and battery technology activities.
To date, Daimler has made more progress with fuel cell technology than any other automaker.
And we plan to expand our lead in this area. To this end, we acquired a majority stake in the
company �Automotive Fuel Cell Cooperation� last October, thereby strengthening our
research and development ability in fuel cell stack technology.
We�ve also achieved a major breakthrough in battery technology. All of you are familiar with
the lithium-ion batteries used in mobile phones, laptops, and digital cameras. However, until
recently, this battery technology couldn�t handle the much higher demands associated with
automotive applications.
But Daimler has solved the problem. Thanks to the integration of the vehicle�s cooling system,
the batteries can now operate continually at optimal system temperatures. This maximizes
their power output, extends their service life, and makes it possible to use this highperformance
technology in automotive applications. We�ve protected this innovation with 25
patents.

Lithium-ion batteries are ideal for use in hybrid vehicles. The Mercedes-Benz S 400
BlueHYBRID, which I mentioned earlier, will be the first production car in the world equipped
with a lithium-ion battery.
As you can see, we�re working at full power to develop tomorrow�s automobiles.
In addition, to exploit further growth opportunities in vehicle-related sectors, we have also
established a small but very effective Business Innovation Team.
The main task of this team, which is made up of experienced executives from various areas, is
to identify and exploit new growth opportunities along the entire value chain.
XIV.
Ladies and gentlemen, at the beginning of my talk I asked three questions:
- Where do we stand today?
- What future targets are we setting for ourselves?
- And how do we plan to reach these targets?
The facts show that Daimler has a strong foundation. Our business operations are running
smoothly � there�s no reason for us to fear comparisons with our competitors.
But there�s another point worth emphasizing here. Our strength is also a springboard �
a springboard to sustained profitable growth. We�ve defined clear strategies to achieve that
goal � and we are implementing them effectively.
Our total workforce of 272,000 employees around the world makes up the best team in the
automotive industry. On behalf of the entire Board of Management, I�d like to take this
opportunity to thank them for their excellent performance and dedication.
But I would also like to specially thank you, our shareholders. We will continue to do
everything in our power to justify your trust in us in the future as well.
Rest assured that the inventor of the automobile still has plenty of positive surprises in store.


Thank you very much! >>

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