WEBVTT - BMW North America CEO Sebastian Mackensen Talks New Luxury Car, Electric Vehicles

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>BMW is unveiling its new seven Series at Grand Central,

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<v Speaker 2>showcasing its most advanced technology yet. Matt Miller is there

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<v Speaker 2>in person and joins us now with the CEO of

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<v Speaker 2>BMW North America.

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<v Speaker 3>Hey, Matt, Yeah, I'm in my comfortable place here in

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<v Speaker 3>the car world, but also at Grand Central Station, which

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<v Speaker 3>is majestic. Here with Sebastian Mackinson, the head of BMW

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<v Speaker 3>North America. Sebastian, welcome, or maybe I should say thank

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<v Speaker 3>you for welcoming me here. Why choose Grand Central Terminal

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<v Speaker 3>for this? It's a global debut.

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<v Speaker 1>Right right it is.

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<v Speaker 4>I mean, we were looking for the right location to

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<v Speaker 4>show our flagship car, the new seven Series, and we

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<v Speaker 4>didn't want to have any location but Vanderbilt Hall at

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<v Speaker 4>Grand Star Station, such an iconic space in this fantastic city.

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<v Speaker 4>It is unmistakable design, but it also stands the test

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<v Speaker 4>of time, and I think that's a very fitting to

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<v Speaker 4>the seventh series for BMW.

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<v Speaker 3>So I'm test driving currently a previous generation seven Series

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<v Speaker 3>stickered at two hundred grand. What kind of margins are

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<v Speaker 3>you making on these cars?

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<v Speaker 4>You know, that's part of our financial calculations, which is

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<v Speaker 4>not something.

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<v Speaker 1>We talk about in the public space.

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<v Speaker 4>But we develop the cars with a lot of investment

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<v Speaker 4>and with a lot of dedication and professionalism and passion,

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<v Speaker 4>and then we sell them at the right price in

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<v Speaker 4>the market.

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<v Speaker 3>So what's the difference between this new car? What have

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<v Speaker 3>you changed versus the previous generation and what are the

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<v Speaker 3>powertrain choices?

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<v Speaker 4>Yes, so one thing is definitely the external looks. I

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<v Speaker 4>think we have cleaned up the front quite a bit.

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<v Speaker 4>You have one line of front lights. Before there were

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<v Speaker 4>two lines. It has become cleaner and I think it

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<v Speaker 4>makes an unbelievable entrance. So this is not a car

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<v Speaker 4>you sneak in unnoticed. You have a grand entrance when

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<v Speaker 4>you come to this car, and if it's at nighttime.

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<v Speaker 4>With a light design, that's even more. We also have

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<v Speaker 4>replaced chrome. Led is the new chrome in this car.

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<v Speaker 4>You see the kidney light layout. We also have a

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<v Speaker 4>new light design on the back. Now in the interior,

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<v Speaker 4>we have a lot of things which we developed, which

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<v Speaker 4>what we call the Neuer cluster, a lot of those

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<v Speaker 4>digital elements ui UX Interface, customer interface.

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<v Speaker 1>They all make.

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<v Speaker 4>It now into other BMW models and the first one

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<v Speaker 4>where this happens is actually the seventh series. Now you

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<v Speaker 4>talked about drive trains, we will have two options on

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<v Speaker 4>the internal combustion engine, a six cylinder and a V eight.

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<v Speaker 4>We will have two options on the pure electric vehicle,

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<v Speaker 4>both being one hundred percent electric drive train.

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<v Speaker 1>And we have also a.

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<v Speaker 4>Pluck in hybrid vehicle when you want to go half

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<v Speaker 4>the way.

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<v Speaker 1>So what privee electric but also have a gasoline?

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<v Speaker 3>What are your customers choosing? I mean, I imagine for

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<v Speaker 3>a luxury vehicle like this, a lot of people want

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<v Speaker 3>the V eight right. On the other hand, as gas

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<v Speaker 3>prices climb, I would also imagine that more people are

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<v Speaker 3>starting to go back to electric after the backlash and

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<v Speaker 3>the loss of the subsidy that we saw last year.

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<v Speaker 1>Yeah, we see.

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<v Speaker 4>I mean, obviously geography geography of the preferences are a

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<v Speaker 4>bit different in the geography of the United States, but

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<v Speaker 4>in general, we saw last year about a quarter of

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<v Speaker 4>our seven serious customers opting for a fully electric car.

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<v Speaker 4>I happened to drive it that vehicle for one year,

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<v Speaker 4>and I have to say the luxuriousness and the luxury

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<v Speaker 4>driving experience in a seventh series is even enhanced more

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<v Speaker 4>when it is purely electric, no vibrations, You're in your

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<v Speaker 4>own space. It is a great, great thing to experience.

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<v Speaker 4>But obviously we are known I mean Bavarian, Bavarian Motorworks.

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<v Speaker 1>We are Bavarian Motorworks.

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<v Speaker 4>We are known for our engines, and people love our

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<v Speaker 4>V eight engine and that's why we give it the

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<v Speaker 4>customers the choice.

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<v Speaker 1>We call it technology openness.

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<v Speaker 4>You can go this way or that, but one thing

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<v Speaker 4>is sure, it's always the seven series, not the compromise vehicle.

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<v Speaker 3>We hear the same thing from Rolls Royce, which is

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<v Speaker 3>of course a brand that you own as well. People

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<v Speaker 3>that want the ultimate luxury often choose the Specter.

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<v Speaker 1>Now they have the Nightingale.

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<v Speaker 3>You know, if they want to spend three, four or

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<v Speaker 3>five million dollars, how much customization can you do on

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<v Speaker 3>your higher end cars? Because you know, right now the

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<v Speaker 3>name of the game is customization.

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<v Speaker 1>Customer drops two three four.

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<v Speaker 3>Thousand dollars, wants to be able to choose the exact color,

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<v Speaker 3>choose the exact interior, and make different combinations.

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<v Speaker 4>I mean, just to make sure we are starting here,

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<v Speaker 4>just around one hundred thousand dollars. Okay, you don't have

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<v Speaker 4>to go that high, as you just mentioned if you

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<v Speaker 4>want to drive a seven serious but that part of side.

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<v Speaker 4>Just to call out some numbers, you have five hundred

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<v Speaker 4>different possibilities for a vehicle color. You can change a

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<v Speaker 4>lot of interior trims, materials and colors, which mathematically makes

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<v Speaker 4>up to seven hundred combinations. And you can also in

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<v Speaker 4>the BMW individual world, you can come with your own

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<v Speaker 4>wishes and we can mention a color if you have

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<v Speaker 4>like your color, which is obviously then a special service,

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<v Speaker 4>but we can make that color and put it on

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<v Speaker 4>your car.

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<v Speaker 3>Sebastian, I got to pin you down on the electric

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<v Speaker 3>vehicle question because since the war in Iran started, we've

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<v Speaker 3>seen gas prices soar, not just.

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<v Speaker 1>Here but around the world.

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<v Speaker 3>And although EV sales had dropped substantially after the end

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<v Speaker 3>of the tax credit, at least online, I've seen more

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<v Speaker 3>and more people, you know, brag about having gotten an

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<v Speaker 3>EV and having a low, you know, monthly bill. What

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<v Speaker 3>are you seeing in terms of EV sales.

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<v Speaker 4>I would say you see in the online what we

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<v Speaker 4>see in the online, what customers do in the online world.

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<v Speaker 4>We see in a slight uptick in interest.

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<v Speaker 1>On our electric products.

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<v Speaker 4>But for the time being, I wouldn't call it a

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<v Speaker 4>drastic change. So I understand the chatter in the in

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<v Speaker 4>the marketplace, in the public space, and we see that

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<v Speaker 4>as well, but it didn't yet and maybe it will

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<v Speaker 4>not materialize on the customer preference.

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<v Speaker 1>So our sales, we do sell electric vehicles, but the.

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<v Speaker 4>Majority of sales is UH is combustion engine vehicles.

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<v Speaker 3>Is the war affecting at all sales of these high

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<v Speaker 3>end vehicles because I look at something like this and

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<v Speaker 3>I think a shake could be driving this through you

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<v Speaker 3>know the Emirates? Are you seeing any drops there?

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<v Speaker 4>I mean, we have always impact of the overall economic

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<v Speaker 4>situation and different markets react different to that. I'm not

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<v Speaker 4>familiar with the exact our impact on the on the

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<v Speaker 4>local sales, but as you can imagine, if you have

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<v Speaker 4>uncertainty which is always impacting the economy, that is not

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<v Speaker 4>necessarily helpful for your vehicle sales.

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<v Speaker 3>I know the United States North America is your territory, right,

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<v Speaker 3>but this car is has got to be a hit

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<v Speaker 3>in China. They love their big limousines, their large luxury sedans.

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<v Speaker 3>How has how has the seven series been doing in China?

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<v Speaker 1>What do you expect from this new vehicle?

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<v Speaker 4>It has been doing very well, and our expectation is

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<v Speaker 4>that with this version that will continue to be the case,

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<v Speaker 4>or probably we have an opportunity there to also expand

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<v Speaker 4>our market position. It is definitely car which is very

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<v Speaker 4>well received in China. But I have to say our

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<v Speaker 4>designers did a fantastic job with this car.

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<v Speaker 1>It really has a global appeal.

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<v Speaker 4>It has this special about special thing about itself. It

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<v Speaker 4>is the seventh series and people expect something from that.

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<v Speaker 4>I mean behind you, it's not on camera right now,

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<v Speaker 4>I'm sorry, but it's the first ever generation of this

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<v Speaker 4>numbers well and that is something which has been built

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<v Speaker 4>and now it's its own legacy. And now with this car,

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<v Speaker 4>with this new front, I think that's a seven.

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<v Speaker 1>And it's a seven in China, in.

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<v Speaker 4>The Middle East, in Europe, and in the United States,

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<v Speaker 4>in South America.

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<v Speaker 3>And I know, I mean, you're number one in terms

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<v Speaker 3>of big luxury car sales in China, but of course

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<v Speaker 3>they're coming after you. They've got a competition on your heels.

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<v Speaker 3>Are you more comfortable in a market like the United

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<v Speaker 3>States where China is held firmly out of the market.

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<v Speaker 1>I wouldn't talk about comfort level.

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<v Speaker 4>I mean I have, as you say, I'm responsible for

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<v Speaker 4>the business in the.

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<v Speaker 1>US and in the America's region.

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<v Speaker 4>Some of the markets we have new competitors in the

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<v Speaker 4>market space or new entries from China. In South America

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<v Speaker 4>mainly maybe now a little bit in Canada. I mean,

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<v Speaker 4>you always have competition in the market. That what keeps

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<v Speaker 4>you on your on your toes and makes you think

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<v Speaker 4>about how you can do things better. So competition as

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<v Speaker 4>such is not really a new thing. So there's one

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<v Speaker 4>competitive more or ten competitors more.

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<v Speaker 1>That's what we have to deal with.

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<v Speaker 4>In every market is a little bit different, all.

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<v Speaker 3>Right, Sebastian, thank you so much for inviting us down

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<v Speaker 3>here at Grants on Sure Terminal showing us the pleasure

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<v Speaker 3>global debut of your new seven series. Bashi and Macatson

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<v Speaker 3>runs the North American business for BMW.