Half Year 2026 Audi AG Earnings Call
Speaker #1: Developed by €0.4 billion, CO2-related provisions, however, provided a positive year-on-year effect of approximately €0.4 billion. This was primarily due to adjustments to provisions as a result of the U.S.
Speaker #1: Greenhouse gas policy changes. Lastly, the performance of the brands was lower year on year. Turning to the remaining drivers in the operating profit bridge, currency effects and commodity hedge valuations had a positive effect of €173 million. Product costs worsened by €238 million, despite our hedging activities. Ongoing cost inflation, including memory chips, weighed on profitability.
Speaker #1: Additionally, lower-than-expected volume had a negative impact on factory costs. Fixed costs and other items had a major positive effect of €759 million. The prior-year period included approximately €0.3 billion in restructuring expenses; those expenses in 2026 were substantially lower, resulting in a positive year-on-year effect of approximately €0.2 billion.
Speaker #1: In addition, lower R&D costs contributed €0.1 billion to the development. The largest positive contribution came from a substantial improvement in overhead costs. This reflects the tangible benefits of our restructuring measures combined with disciplined cost management.
Speaker #1: As you can see, the market environment continues to place considerable strain on our performance. The benefits of restructuring and strict cost discipline are becoming increasingly visible, but they do not yet fully offset the commercial burdens we face.
Speaker #1: This is reflected in our updated outlook for the full year. We are lowering our full-year guidance to 5% to 7%. The absence of significant negative one-off effects will support earnings.
Speaker #1: Global CO2 provisions are now expected to be a slight tailwind year-on-year; Europe remains a major burden, while easing in North America creates a year-on-year relief.
Speaker #1: Our expectations for the earnings payback from restructuring are unchanged; the headcount reduction is on track. The performance program and continued cost discipline are expected to provide additional support, especially towards year-end.
Speaker #1: At the same time, the headwinds have intensified substantially. The drop-through from the revenue line, driven by volume and pricing, is a major factor. A further burden comes from cost inflation. Early in the year, we anticipated a significant positive year-on-year effect from product cost optimization.
Speaker #1: The revised guidance range still implies a substantial step-up in profitability compared to the first half. In line with the seasonal pattern of the past two years, we expect the fourth quarter to make a strong contribution.
Speaker #1: This will be driven by the timing of our new products, especially the Audi Q7, Q9, and our expanded RS lineup. The seasonality is further reinforced by the back-end-loaded profile of our cost-saving measures.
Speaker #1: Let me now turn to the investments. Cash R&D decreased by 1% to €2.1 billion. The R&D ratio increased to 7.2%, mainly reflecting the lower revenue base.
Speaker #1: The capitalization rate rose slightly to 41.7%. Capex amounted to €1 billion, 16% below the prior-year level, and equivalent to 3.4% of revenue.
Speaker #1: In total, our investments—capex and R&D combined—represented 10.6% of revenue in the first half. Our full-year guidance remains unchanged. We expect that lower investments also contributed to our net cash flow development.
Speaker #1: In the first six months of 2026, net cash flow amounted to €1.9 billion, marking a significant improvement year-on-year. Gross cash flow reached €2.9 billion, slightly above the prior year level.
Speaker #1: Profit before tax declined, primarily reflecting a weaker financial result driven in part by the China business. Non-cash effects had a positive impact, in particular due to developments in residual values.
Speaker #1: Changes in working capital contributed a positive year-on-year effect of €0.3 billion. We also received a cash inflow from Porsche in the first quarter for the use of our Audi PPC technology.
Speaker #1: Cash flow from investing activities came in at minus €1.8 billion. The year-on-year improvement was mainly driven by significantly lower capital expenditure. Last year's investments in participations included the purchase of shares in our Formula 1 team. In this first half of 2026, no material investments in participations were made.
Speaker #1: Our net cash flow of €1.9 billion provides a solid foundation for the remainder of the year. Our full-year guidance is maintained at €3 to €4 billion, and continues to include a further installment of Porsche licensee payments.
Speaker #1: Looking at the individual brands—and let's start with Bentley—deliveries to customers declined by 14%, primarily reflecting weakness in China's luxury segment and the impact of U.S. tariffs.
Speaker #1: Deliveries in the Middle East were disrupted by the conflict, adding to the decline. Revenue decreased by 12% to €1 billion. The operating result came in at €47 million, corresponding to a margin of 4.5%.
Speaker #1: In the second quarter, the brand more than compensated for the first-quarter loss, achieving an operating return on sales of 12.6%. We expect Bentley to maintain this financial performance.
Speaker #1: Lamborghini continued to perform at a strong level despite the challenging market backdrop. This underlines the brand's enduring appeal. The brand delivered 5,422 vehicles to customers. The 5% year-on-year decline primarily reflected the introduction of US tariffs and the Middle East conflict.
Speaker #1: Second-quarter deliveries were sequentially stronger, driven by the Temerario rollout. Revenue rose by 7% to €1.7 billion, while wholesales remained flat. Growth was supported by improvements in mix, pricing, as well as personalization.
Speaker #1: Operating profit came in at €395 million, corresponding to an operating margin of 22.7%. U.S. tariffs and amortization weighed on the result. Lamborghini's refreshed portfolio underpins our expectation of a robust performance in 2026.
Speaker #1: Ducati's results remained resilient against the current conditions in the motorcycle market. Ducati delivered around 28,000 motorcycles, representing an 8% year-on-year decline. In the second quarter, we saw a positive impact of the model initiative, in addition to the usual seasonality.
Speaker #1: In the first half in the first half of the year, revenue declined by 12% to 489 million euros, in line with lower wholesale volumes.
Speaker #1: The operating return on sales came in at 6%, with an operating profit of €29 million. As the year progresses and portfolio updates continue to take effect, we expect Ducati's performance to remain solid, despite considerable market headwinds.
Speaker #1: Ladies and gentlemen, our revised guidance still implies a substantial step-up in profitability over the second half of the year. We expect an improvement in the top line.
Speaker #1: As Marco outlined, our product momentum is building. The Q9 is set to launch tomorrow, followed by the Audi A2 e-tron unveiling in the third quarter.
Speaker #1: The rollout of the updated A3 family and the new Q7 further strengthens our lineup. In addition, we are seeing strong order intake for the updated Q4 e-tron.
Speaker #1: The Q5 volumes are expected to accelerate in the second half of the year as well. Our product initiative will therefore provide clear support to volumes in the second half of the year, and even beyond.
Speaker #1: Our brand activities are gaining traction. The Formula 1 engagement is contributing significantly to brand perception and visibility, and our Audi Nuvolari further amplifies our positioning.
Speaker #1: We are making progress on the cost side as well. The restructuring measures are being implemented as planned, and we are ahead of expectations on the acceptance rates for our voluntary programs.
Speaker #1: We continue to apply strict cost discipline. The tailwind from lower overhead costs is clear evidence that these measures are delivering. The same discipline is reflected in our investment approach.
Speaker #1: Finally, our performance program is making a substantial contribution to efficiency and cost effectiveness. Many measures scale with volume, and a number of the effects are backend-loaded through the year.
Speaker #1: All these initiatives are progressing well and will support our business beyond 2026. At the same time, the environment has become significantly more challenging. The measures we have implemented so far are necessary, but they will not be enough.
Speaker #1: To remain competitive, the Volkswagen Group and Audi must become more efficient, more focused, and more resilient. Together with the Group, Audi is therefore defining the next steps required to strengthen competitiveness and secure our long-term future.
Speaker #1: Having said that, we are now happy to take your questions. Thanks for listening.
Speaker #2: Thank you, Jürgen. Thank you, Marco. Valentina, we can now start the Q&A session.
Speaker #3: Thank you, Robert. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on their telephone.
Speaker #3: You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star, then 2.
Speaker #3: Questioners on the phone are requested to disable loudspeaker mode and, if possible, turn off the volume from the webcast while asking a question. Anyone who has a question may press star and 1 at this time.
Speaker #3: The caller to you, Robert, for the first question.
Speaker #2: Thank you. The first question comes from José Osomendi from JPMorgan. Please go ahead.
Speaker #4: Thank you, Robert. Good morning. Three quick ones, please. One on the residual value topic: Is this something you expect to continue in Q2, Q3, and Q4, or was this a one-time impact for the first quarter—for Q2, rather?
Speaker #4: And do you expect this—can you quantify, please, the benefits of the overhead cost savings you saw in Q2? Was this a bucket of maybe $300 to $400 million?
Speaker #4: That was question one. Question two is if you can speak broadly about how you plan to manage the declining profitability across Lambo and Bentley.
Speaker #4: And question three around the your thinking your strategy thinking around investments in the US and whether you see that they need to set up a production in the US.
Speaker #4: Thank you.
Speaker #2: Okay. Hello, José. Thanks for your questions. Your first question regarding residual value: in our operating profit bridge, we see a negative effect of €0.4 billion.
Speaker #2: In the last year—and that's important—last year, in the first half of the year, we had a positive effect of €170 million.
Speaker #2: In the first half of 2026, on the other hand, we had a negative effect of roughly €200 million. So in total, a €0.4 billion negative swing from the first half of 2025 to 2026.
Speaker #2: As you know, the development of residual values is uncertain. However, at the moment, we assume for the third quarter and also for the fourth quarter that there will be no material impact on the residual value side.
Speaker #2: So your second question is regarding the overhead costs. In the operating profit bridge, the overhead costs contributed around €0.4 billion positively, reflecting our cost discipline and the execution of our measures, especially on the personnel cost side.
Speaker #2: The effect is structural, driven by restructuring measures. As I mentioned, leaner organizational structures, and, as I mentioned, continued cost discipline. Your question regarding Lambo and Bentley.
Speaker #2: I will start with I start with Lamborghini. So Lamborghini is still working in in a very, very strong position. The margin is still above 22%.
Speaker #2: We now have positive momentum in the second half of the year, also from the product side. The new Lamborghini Urus SE is now ready to start, and we also have positive momentum at Lamborghini with the rollout of the Temerario.
Speaker #2: On the negative side, there are still there's still a burden coming from the US tariffs and negative exchange rates. Bentley, we expect a strong improvement in the second half of the year, and the first indication is already is already on the table.
Speaker #2: It's the Q2. The margin of Bentley increased to 12.6% in the second quarter of 2026, and we expect this performance also for the remainder of the year.
Speaker #2: Your last questions regarding US, we are still working on the on our investment in the US on the localization. We are in negotiations with the US government, and does is a condition that we have that we get a substantial support.
Speaker #2: So, the negotiations are ongoing, and we will give you an update as soon as possible.
Speaker #4: Thank you again.
Speaker #2: Okay, thank you, José. And we continue with Henning Krossmann from Barclays. Henning, please go ahead.
Speaker #4: Yes, yes. Thank you. Thank you, Robert. Good morning. Thank you for taking the question. First one, probably also to...
Speaker #2: Henning, you were difficult to understand. Yeah, it was very interrupted.
Speaker #4: Yeah. Okay. No.
Speaker #2: A little bit better. Just give it a go, and let's see.
Speaker #4: Sorry about that. The first question was on the sequential improvement in the second half. Especially also in light of the €400 million provision release that you had in the first half, I'm just wondering how big the share of the new models and the S variants can really be, and how significant the profitability uplift from these variants is, right?
Speaker #4: So, for example, I don't know. If you have 20 percent of the portfolio margin is 5 percent higher, then it's just one point on the profitability.
Speaker #4: So, if you could just explain a little bit more. I appreciate that's the Q7, Q9, A6, S variants, but how—you know—how big is the weight, really?
Speaker #4: Or are we expecting other supporting benefits in the bridge in the second half that are more meaningful? And the other piece is, second question on the EV profitability: obviously, you know, really strong order intake.
Speaker #4: We are seeing relatively better performance now in volume compared to the non-BEV portfolio. So, where do we stand in terms of margin dilution on the BEVs? And how are you managing that in the second half?
Speaker #4: Thank you very much.
Speaker #2: Okay. First question regarding the second half: what are the levers to improve the margin in the second half? So, first of all, we really expect better volume in the second half.
Speaker #2: And, you know, we have this usual seasonality in the last two years, where the second half—and especially the fourth quarter—was always the strongest.
Speaker #2: We have now these strong product momentum with the new A3, the or the the the major update of the Q3, the major update of the Q4, the all new Q9, the the Q7, and the very margin attractive RS models.
Speaker #2: So, we have really strong product momentum in the second half of the year. In addition, models like the A6 Allroad also have a very, very strong margin.
Speaker #2: On the other hand, we are making progress on the cost side. As I mentioned before, we also expect here a strong momentum in the second quarter, as, for example, our measures on the personnel side will now be effective step by step.
Speaker #2: And also our performance program is somehow backloaded and we see normally the strongest impact here also in the in the fourth quarter. And maybe the last point, also on the on the CO2 provision side, compared to last year, we don't expect the strong impact from the CO2 from the CO2 provision side in the in the fourth quarter and also in the third quarter 2020 2026.
Speaker #2: EV profitability—yeah, we are still working on the EV profitability. We will make the next big step with the next generations of our platform.
Speaker #2: On the other hand, we are also improving the profitability with our PPE models. For example, we are going to introduce the LFP battery. This is also a huge step on the cost side.
Speaker #2: If we take into account, especially in Europe, the CO2 effect, we are close to margin parity—inclusive of the CO2 burden on the one hand for the combustion engines, and the benefit on the other hand for the BEVs.
Speaker #4: Okay. Great. That's helpful. Thank you. But just to clarify, just so I get this right, if I take out the provision release for CO2, then the first half is closer to 2%, right?
Speaker #4: So we're basically saying the underlying margin needs to go from 2% to, at the midpoint, 8% in the second half. And you're quite happy with that development, mainly thanks to the product momentum.
Speaker #2: This was a very quick calculation, so I can't confirm it so quickly. What I can say is, yes, we have a positive effect in the first quarter coming from CO2.
Speaker #2: On the other hand, we don't have compared to the to the first half 2025, we don't have the burden from coming from restructuring costs.
Speaker #2: Yeah, so there's maybe, let's say, somehow a compensation between positive and negative effects also in the first quarter. So, I think your calculation is on a very, very high level.
Speaker #2: So I can't confirm it in that detail.
Speaker #4: Okay. And just very briefly, did you book the IEPA refund as well? The US tariff refund in the second quarter—did you book anything?
Speaker #2: Yeah, but on a very, very low level, because most of our tariffs are based on Section 232, not on the EAPA. Yeah.
Speaker #2: So it's a it's a low low double digit million number for the EEPA refund. So compared to the total amount, it's it's almost nothing.
Speaker #4: Thank you so much. All the best.
Speaker #2: Okay, thank you, Henning. We will move on to the next question, which comes from Tim Wokosa at Deutsche Bank. Tim, please.
Speaker #4: Yeah. Thank you very much, Jürgen, Marco, and Robert. Just a clarification to what Henning was just asking. Now you had a bit more time, Jürgen.
Speaker #4: Is this calculation about the second-half margin correct? And also, on the BEF dilution, we typically think in EBIT margin terms. I assume when you talk about gross margin parity, including a CO2 benefit, you are referring to the gross margin.
Speaker #4: Margin parity—you talk about the gross margin, not the EBIT margin. And then I have three other questions, please. The first one is: now that we're reading so much about Neckarsulm again in the press—obviously you're not going to comment on that—but Jürgen, can you run a plant in Germany with 150,000 units output annually at any sort of profitability level?
Speaker #4: In my view, I struggle to get there, but maybe just theoretically—not talking about that specific plant—but, in general, a plant with 150,000 units in Germany.
Speaker #4: Secondly, Marco, when we think about your USP in selling products, does this 'Made in Germany'—that it's produced and manufactured in Germany—does that get you any benefit from the marketing side? Or are we at a point where this is like Apple—basically no one cares, as long as it's engineered in Germany, it's perceived as a German car?
Speaker #4: Considering what we see from the Cayenne, for example, with Porsche, and also the Q7 out of Bratislava, I would assume that that is the case.
Speaker #4: But just to ask you again, and finally, for both of you: When you put yourselves into the shoes of investors and think about the Audi story at this point—
Speaker #4: It used to be very much about product momentum for the last two years. Now it still is, judging from what you told me on the Lamborghini side as well as on the Audi side, Jürgen and Marco, but it increasingly feels to me like this is turning more into a cost-efficiency story.
Speaker #4: Can you confirm that for me, or are we maybe being too negative regarding product momentum? Perhaps we just anticipated this too early, and now it's really coming in the next 12 months.
Speaker #4: Thank you.
Speaker #2: Okay, so I’ll start with the easy question. The margin parity—yes, it’s based on contribution margin, gross margin, after CO2, so taking into account the positive effects for the BEVs and the negative effects.
Speaker #2: On the ICE side, regarding your question, regarding Necker's Ulm. So please understand, so I can't comment any rumors that are in the press at the moment.
Speaker #2: So, we can't comment on units and volume so far. We will start negotiations with our workers' council, and we have to figure out what are the right measures and what is the right volume for both factories in Germany—Neckarsulm and Ingolstadt—as well.
Speaker #4: Yeah, then I will cover Tim. Hi, pleasure to talk to you. Just for the minutes, perhaps Necker's Ulm is sitting at the level of this year's 180,000 units.
Speaker #4: But again, as Jürgen said, we see it in the Audi world as two factories, and we are really evaluating the future. So there's nothing we can say at this point in time.
Speaker #4: Regarding your question – 'Made in Germany' has relevance, in particular, in certain markets and areas. But it's more the focus on where the cars are engineered.
Speaker #4: If you look across the world, in particular in US markets, we see that the the engineering part has still still a massive relevance. But on the contrary, as you know, in US, made in US, as as our competitors are doing it, has significant relevance for the US market.
Speaker #4: And as Jürgen said earlier, that's why we are further evaluating the footprint for us in the US market with local production.
Speaker #4: If you look in in the in the Chinese market, and that's perhaps also the question for for you, from your perspective, you see that the Chinese market is is massively changing.
Speaker #4: They're stepping away from typical brand behavior. Brands like Porsche, and also products within our portfolio, are struggling here. Customers in China are placing bigger relevance on, obviously, product substance and also connectivity.
Speaker #4: So the brand relation there is not as strong as it used to be. For us in Europe, and the German market, this remains still a major topic.
Speaker #4: And also, overseas markets like Korea—we've shown it earlier—we have the new A6 in Korea now. It has a good opportunity, but again, from an overall perspective, we really split it by region.
Speaker #4: But "Made in Germany" is more focused on where the car is actually built, as per your question, but the impact comes from where the car is engineered and the level of quality that we're delivering.
Speaker #4: I think this is still the key part for us at Audi, and we will see it with the Q7 and Q9 in the U.S. market at a very high level of quality.
Speaker #4: So, that's absolutely essential for us.
Speaker #2: Yeah. And you asked both of us about the Audi story. So I would like to start, and maybe Marco, you can.
Speaker #2: Jump in. Yeah. So from my point of view, our new strategy, Mission Vorsprung, defined our way forward on both sides—on the revenue side, as well as on the cost side.
Speaker #2: So on the revenue side, we focus on three dimensions. First, our new design, Radical Next. Our new innovative interior—yeah—including AI-based companion. And the third point: autonomous and automated driving.
Speaker #2: These are the major levers on the product side, coming with our new model lineup. And we will start next year with the new Audi Q Sport.
Speaker #2: The first proof point you already see, it's the it's the Nuvolari really a highlight. The first car with our new design language. And the the model lineup is is a very strong momentum on on the revenue side.
Speaker #2: On the other hand—and it's completely right—we have to improve our costs, and we have a clear focus on product costs, because from my personal point of view, here's the main lever to improve our profitability.
Speaker #2: But in addition, we also have to improve our overhead costs and our factory costs. So these are, let's say, the two target directions: on the one hand, strengthening our revenue side with strong product momentum and a clear strategy.
Speaker #2: On the other hand, we need to improve our cost side, focusing on product costs and overhead costs. We have to adjust our structures, and we need to be quicker now.
Speaker #2: We also have to reduce our complexity.
Speaker #4: Yeah, maybe that's the quick answer. Yeah. No, just a couple things to add. Tim, obviously Audi brand stems mainly from the product, that's for sure.
Speaker #4: And also, on the marketing side and the positioning side, there is even more to come now. We have had products now—Nuvolari being launched, you have seen our C Sport.
Speaker #4: So there will be further development also on the exterior appearance. We call it 'Radical Next' design. And this design language will, of course, be implemented across the product range.
Speaker #4: So we will uplift all of our models there. But the significant task on the cost side, as pointed out by Jürgen already, is we need to get more profitable also on our best models.
Speaker #4: So that's one of the major challenges we are having, because we are driving—or we are having good momentum in the European markets, where the profitability sits.
Speaker #4: On those models, and that remains for us a significant exercise, and also in the future product portfolio, that we don't have any further complexity in there by doubling product.
Speaker #4: So, we will focus, then, on different drivetrains for the different regions. I think this is absolutely essential.
Speaker #1: Thank you, guys. That's very clear. And, Marco, I think I will see you at your Sales Summit in October. Very much looking forward to that.
Speaker #1: Thank you.
Speaker #4: All right. Thank you very much, Tim. Bye-bye.
Speaker #2: Tim, we move on to the next question, which comes from Horst. Horst Schneider from Bank of America. Horst, please go ahead.
Speaker #3: Yeah. Thank you. And thanks for taking my questions too. I joined the call a little bit late. Not sure if you mentioned that. I as always, I have got problems now to identify what's the what's the bridge exactly for the second quarter.
Speaker #3: Since you just provide the bridge for the first half of the year, I see a negative impact on market volumes, a positive impact on fixed costs, and a negative on product costs.
Speaker #3: Could you maybe outline specifically, just for Q2, the bridge and what have been the offsetting factors now in the second quarter? If I get it right, you had this provision release on CO2, and again, you said €200 million residual value correction.
Speaker #3: But then, also, maybe you can quantify what was the tariff impact that you show in this line. That's number one. Then, on number two, when I look at your new outlook, basically it seems to me that you anticipate a recovery in China as well in the second half.
Speaker #3: So maybe you can provide more details on that. To what extent do you expect this recovery? Also, maybe you can tell us something about the price mix environment, excluding all the factors on residual values, etc.
Speaker #3: Just say, how is price mix developing in general, and what's your expectation for H2? And the last one is on ADAS. When are you now launching Level 2+ ADAS into your vehicles?
Speaker #3: In which year, or maybe even which semester or quarter? If you could tell us, that would be great. Thank you.
Speaker #2: Okay. A couple of questions. We have seven minutes. I hope the time we have enough time so let's let's get started. With the with your question regarding regarding Q2.
Speaker #2: I can run you quickly through the profit bridge for the second quarter compared to the second quarter of 2025. So, volume was negative in the second quarter.
Speaker #2: By minus €0.4 billion. On the other hand, we already had a positive mix effect of plus €0.3 billion. Pricing deteriorated with minus €0.2 billion.
Speaker #2: And on the other hand, we can compensate with a positive effect from the adjustment of the CO2 provisions. It's also €0.2 billion. The tariff impact for the second quarter, standalone, was €0.2 billion.
Speaker #2: For the first half of the year, it was €0.4 billion in total. And we also had, on the volume and market side, a negative impact from residual values.
Speaker #2: With roughly minus €0.2 billion. The next item of the profit bridge: we had a positive effect from currency and currency valuation, as well as from our material cost hedging.
Speaker #2: So, we had a positive effect here, by €0.1 billion. On the other hand, product costs were again negative. The reason primarily was higher material costs, driven by, for example, memory chips and higher energy prices.
Speaker #2: And last but not least, we had a positive impact of €0.4 billion coming from fixed costs and other items. So, first point: compared to the second quarter of 2025, we don't have any negative impacts coming from restructuring expenses.
Speaker #2: And it's an effect of roughly €0.1 billion. We also had a positive effect coming from our cost discipline, so our overhead costs improved by €0.1 billion.
Speaker #2: So this was, let's say, the rough rough overview of the second quarter. Hope it's helpful. So, outlook to China: the market in China is challenging and will remain challenging this year.
Speaker #2: So, we expect in the second half of the year that we can maintain our market share at the moment. And we have to see how the premium market will develop in the second half of the year.
Speaker #2: So, pricing and mix for the second half of the year should be positive, because we are now introducing a lot of cars with a good margin.
Speaker #2: Q7, Q9, as I mentioned before. For example, and also our RS model. So we expect a benefit and a tailwind in the second half of the year coming from our product momentum.
Speaker #2: And regarding ADAS Level 2 Plus, I have to come back to you because I don't have the details here. But we will give you this answer later, if that's okay with you.
Speaker #3: Absolutely okay. Just to follow up, then, on the volume question: it seems to me that you expect a quite significant increase in unit sales ex-China, global ex-China, in H2.
Speaker #3: Right reading?
Speaker #2: That's right.
Speaker #1: Yeah. So for us, in particular, when we look into the North America region, we expect positive momentum for the second half of the year.
Speaker #1: In North America, driven by the new products and also, as you know, we have seen this impact from the tariff change on the F side as well.
Speaker #1: So we expect the second half in North America to be more positive. We've seen the first indications since May that we are performing ahead of last year's level.
Speaker #1: In Europe, we are also expecting positive momentum due to, especially, the A2 being a contributor as well. The second, really, is quarter four. In China, the major challenge has already been pointed out.
Speaker #1: And then also overseas. We don't know what's happening, obviously, in the Middle East—conflict there. But in a nutshell, Europe and North America, we expect a positive development.
Speaker #1: China, we need to see what the premium market will do. And overseas, it really depends on the crisis we have there. That's the outlook from our perspective.
Speaker #1: Yeah.
Speaker #3: So, this is still just a last clarification. So you gain market share in North America and Europe due to the new models in H2, right?
Speaker #1: Sorry, can you please repeat the question?
Speaker #3: You gain market share in Europe and North America. That's the plan for H2.
Speaker #1: No. In Europe, we are increasing our market share. So in Europe, we are growing market share. In North America, not, because the competition—BMW and Mercedes—are much stronger than we are.
Speaker #1: Due to the tariff situation.
Speaker #3: So when you talk about rising sales in North America, is that in line with the market, right, in H2?
Speaker #1: Yes, so that's in line with market expectations for the second half of the year. Q7 and Q9 are supposed to be the main contributors here as well.
Speaker #4: If anything was left unanswered, please contact us at the Audi Investor Relations team. Thank you very much for your participation. Thank you, Jürgen. Thank you, Marco, for your support.
Speaker #4: And we all wish you a nice day. Take care, and speak to you soon.
Speaker #2: Thank you.
Speaker #5: Ladies and gentlemen, the conference is now over. Thank you for choosing Carworld Call, and thank you for participating in the conference. You may now disconnect your lines.
