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[00:00:01] you are. Business on BBC News. Make
[00:00:01] Make the connection. MUSIC
[00:00:09] MUSIC
[00:00:18] These are the latest headlines
[00:00:20] from BBC News. 12 people are killed killed and hundreds injured in a
[00:00:23] a missile attack on Riyadh's international international airport. Saudi authorities
[00:00:27] authorities blamed the Houthis for for the attack, which is the deadliest
[00:00:30] deadliest in more than a decade. decade. President Trump says Ukraine
[00:00:33] Ukraine needs a new president who who can make a deal after President
[00:00:36] President Zelensky's criticism of
[00:00:38] of the US., Russia diesel deal, the
[00:00:41] the leader of India's Cockroach Janta Janta Party is released along with
[00:00:44] with two other senior leaders after after protests in Delhi. Earlier,
[00:00:48] Earlier, the police said thousands thousands of protesters detained detained on Saturday had also been
[00:00:52] been released. An investigation is is under way after a man who entered
[00:00:56] entered the tiger enclosure at Yorkshire Yorkshire Wildlife Park was mauled
[00:00:59] mauled to death. The park remains
[00:01:00] remains closed today and Manchester Manchester City face Liverpool later
[00:01:04] later in city's first game since since being found guilty of breaching
[00:01:07] breaching the Premier League's financial
[00:01:11] financial rules. Global business
[00:01:19] business news from the boardroom boardroom or grassroots BBC News News cuts through the jargon to add
[00:01:23] add colour, depth and context with with live reaction from Wall Street
[00:01:27] Street and Asia studio interviews interviews with top CEOs and the
[00:01:31] the latest innovations in technology.
[00:01:33] technology. Talking Business. Hello
[00:01:37] Hello and welcome to Talking Business. Business. Here's what's on the programme
[00:01:39] programme this week. The damage done
[00:01:41] done by diesel as high prices blight blight the global economy will ask
[00:01:45] ask if Europe can cut its long-term
[00:01:48] long-term dependence on imports of of this vital fuel war in the Middle
[00:01:51] Middle East. And Europe has redrawn redrawn the global energy map. But
[00:01:54] But is the damage to the global economy
[00:01:57] economy also here to stay? I'll hear
[00:01:59] hear from this trio of experts. The
[00:02:02] The European Commission's energy energy spokesperson tells me how
[00:02:05] how the continent can limit the damage
[00:02:07] damage from expensive diesel. This This expert on Chinese energy policy
[00:02:11] policy will explain what Beijing's Beijing's restrictions on exports
[00:02:14] exports mean for the rest of the the world, and this leading economist
[00:02:17] economist lays out what it might might mean for the global economy
[00:02:20] economy and how businesses and consumers consumers can make ends meet, and
[00:02:24] and the sound of European manufacturing.
[00:02:26] manufacturing. The boss of one high high end German audio firm tells
[00:02:30] tells me how he pitches his products
[00:02:32] products in China amid growing trade
[00:02:35] trade tensions. Welcome to the programme.
[00:02:41] programme. Our citizens need and
[00:02:44] and deserve affordable energy. Those Those words could come from any number
[00:02:47] number of politicians around the the world right now. They were though
[00:02:50] though the thoughts of EU Commission Commission President Ursula von der
[00:02:53] der Leyen after this month's agreement agreement by leaders of the G7 advanced
[00:02:57] advanced economies to release 100
[00:02:59] 100 million barrels of oil and diesel diesel from their stockpiles amid
[00:03:03] amid the wars in the Middle East East and Ukraine. It marked the second
[00:03:06] second major release this year. It It happened because high energy prices
[00:03:10] prices continue to put pressure on on prices right across the global
[00:03:13] global economy. And that inflation inflation has meant the US Federal
[00:03:17] Federal Reserve and other central central banks have felt the need need to push up interest rates in
[00:03:20] in an effort to suck money out of
[00:03:23] of the economy. But why has diesel diesel in particular become such
[00:03:26] such a crisis? And what can be done done about it in the longer term?
[00:03:30] term? Given it's so important to to powering the global economy? Well,
[00:03:33] Well, diesel prices have been climbing
[00:03:36] climbing steadily in the United States, States, but it's been a similar picture
[00:03:39] picture in Europe and other parts parts of the world since the Iran
[00:03:43] Iran war started earlier this year. year. War damage to refineries and
[00:03:46] and other infrastructure in Russia Russia and the Middle East has redrawn
[00:03:50] redrawn the global diesel map with with a much bigger share now coming
[00:03:54] coming from the United States. That That has increased President Trump's
[00:03:57] Trump's leverage, perhaps explaining explaining why he was able to use
[00:03:59] use the threat of an export ban to
[00:04:01] to force that release of reserves reserves ahead of the US mid-term
[00:04:05] mid-term elections. Europe has a a lot of diesel, and they're going
[00:04:09] going to be making a major world
[00:04:12] world contribution. And so are we.
[00:04:13] we. And we're not going to be doing
[00:04:16] doing the export ban. We're going going to be doing what we're supposed
[00:04:19] supposed to do. But I did ask them them and they're going to we're going
[00:04:22] going to have a lot of oil very shortly, shortly, as soon as Iran ends, which
[00:04:25] which won't be long. It's not going going to be long. You're going to
[00:04:28] to have oil go down to the price
[00:04:31] price it was before, maybe even lower lower than I got it at the beginning.
[00:04:35] beginning. The EU is one part of of the world that's heavily reliant
[00:04:38] reliant on imported diesel, and nearly
[00:04:40] nearly 40% of its imports have been been coming from the US. And because
[00:04:44] because diesel powers most lorries,
[00:04:46] lorries, tractors and buses as well
[00:04:49] well as 38% of EU cars, its price
[00:04:51] price has had an impact right through through the economy. At a minimum,
[00:04:54] minimum, depending on the horsepower horsepower of the vehicle. Our costs
[00:04:56] costs can range from 350 a day to
[00:04:59] to as much as 600 a day for larger larger machines and bigger farms.
[00:05:02] farms. Can we keep going? No we can't. can't. We're at a standstill. We
[00:05:05] We should already have completed completed at least half of the work work needed to prepare for sowing
[00:05:09] sowing the seeds. But everything's everything's come to a halt. Fuel
[00:05:11] Fuel used to just be another expense. expense. Now it decides how long
[00:05:15] long I can work. A few years ago, ago, gas was cheaper. Now, with everything
[00:05:18] everything else increasing, I can
[00:05:20] can barely make ends meet. I've got
[00:05:23] got to travel to work 30 minutes
[00:05:25] minutes nearly around. I spent 200
[00:05:29] 200 miles per week and that cost cost me so much just to go and coming
[00:05:32] coming back. At the moment I'm looking looking for something now remotely
[00:05:36] remotely just to save money because
[00:05:38] because it's ridiculous. I cannot
[00:05:42] cannot cope you know, either you you spend it on food or fuel. So
[00:05:46] So you've got to balance what's what
[00:05:49] what is the priority? Is it the food food for the family or is it the
[00:05:52] the petrol? So what difference will will that release of strategic reserves
[00:05:56] reserves make to businesses and consumers consumers across Europe who, as we've
[00:06:00] we've just heard, are struggling struggling with high energy prices?
[00:06:02] prices? I've been speaking to the
[00:06:04] the European Commission's energy
[00:06:07] energy spokesperson Anna-Kaisa Itkonen. Itkonen. Welcome to Talking Business. Business. Good to have you here.
[00:06:11] here. And maybe talk to me first first of all about that release of
[00:06:14] of strategic reserves. Why did it it take the United States and that
[00:06:17] that threat from President Trump Trump to encourage maybe force the
[00:06:20] the EU to release those reserves?
[00:06:22] reserves? The main thing is that
[00:06:26] that G7 leaders made a commitment
[00:06:28] commitment not to introduce any bans
[00:06:30] bans for from our point of view, view, European citizens need and
[00:06:34] and deserve affordable energy, and and this is now a step forward. Does
[00:06:37] Does that now mean that prices at at the pump will fall? Because we've
[00:06:41] we've seen the impact of higher energy
[00:06:43] energy and fuel and gas prices, but
[00:06:45] but particularly diesel is what is
[00:06:47] is of concern. It is true that diesel
[00:06:50] diesel prices have basically doubled. doubled. I'm talking about the prices
[00:06:53] prices in Europe. What we have been
[00:06:55] been seeing since the closure of
[00:06:57] of Strait of Hormuz. And we trust
[00:07:00] trust that the decision and the subsequent subsequent action that will be taken
[00:07:03] taken by International Energy Agency Agency and G7 will positively impact
[00:07:07] impact oil and oil product prices.
[00:07:09] prices. But obviously, from the European
[00:07:11] European perspective, as long as
[00:07:13] as we rely and import fossil fuels, fuels, we are obviously importing
[00:07:17] importing the shocks and crises that
[00:07:19] that come with them. What are the
[00:07:21] the levers that you can pull? To
[00:07:24] To make sure there is consistent consistent supply, but that prices
[00:07:28] prices are affordable? Because we we know that, particularly for diesel,
[00:07:31] diesel, it has huge repercussions repercussions for the wider economy.
[00:07:33] economy. It is true in Europe we
[00:07:38] we refine approximately 85% of our
[00:07:40] our own production. Our suppliers
[00:07:44] suppliers are well diversified across across global markets. So for US,
[00:07:48] US, we are already we're in a comfortable
[00:07:51] comfortable situation as regards regards getting supplies. But then then of course, as regards prices,
[00:07:55] prices, I mean, we're talking about about a global crisis. And then obviously
[00:07:59] obviously what we can do in the European
[00:08:01] European Commission is, is it has
[00:08:03] has its limits. So what we are going
[00:08:05] going to be doing now in short-term
[00:08:08] short-term is to ensure for Europeans Europeans that we take all the measures,
[00:08:12] measures, including temporary state state aid framework, that we are are going to be prolonging. We are
[00:08:16] are going to postpone our methane methane regulation by one year. So
[00:08:19] So these are the type of measures, measures, what we really are facing
[00:08:22] facing now is a crisis of high energy energy prices. What we are facing
[00:08:25] facing now is an affordability crisis. crisis. And I suppose for the right
[00:08:29] right price, anything can be made made available. I suppose that's
[00:08:32] that's the issue. Maybe in that focus focus on renewables. We all took
[00:08:36] took our eye off of the affordability
[00:08:39] affordability of supply of fossil fossil fuels. And that's why we're we're facing the challenge that we
[00:08:43] we face today, isn't it? That is
[00:08:45] is correct. And when we look at the
[00:08:48] the consumer prices for electricity, electricity, for example, in our
[00:08:51] our member states, the lowest prices, prices, consumer prices are in those
[00:08:55] those member states where the energy
[00:08:57] energy mix is mostly clean, meaning meaning renewables and nuclear. So
[00:09:00] So there is also a clear economic economic incentive to move towards
[00:09:04] towards cleaner energies. But obviously obviously this is the longer term
[00:09:07] term strategy. And now it is possibly possibly going to be a very difficult
[00:09:11] difficult winter as such. So therefore therefore we are now also focusing
[00:09:15] focusing on the shorter term measures
[00:09:17] measures that can have bite immediately. immediately. Anna-Kaisa Itkonen thank thank you for being on the programme
[00:09:21] programme with us this week. It's It's good to talk to you. Thank you
[00:09:23] you for having me. Thanks a lot. lot. On the other side of the world,
[00:09:27] world, China continues to have a a huge influence on global energy
[00:09:30] energy markets. It suspended most most refined fuel exports for October
[00:09:34] October as the country prioritises prioritises domestic supply along
[00:09:38] along with the US., China is one one of the world's major producers
[00:09:41] producers of diesel. So what impact impact could it have on the already
[00:09:45] already under pressure diesel price? price? My next guest is an expert
[00:09:48] expert on Chinese energy policy at
[00:09:50] at the Oxford Institute for Energy
[00:09:52] Energy Studies. Doctor Michal Meidan, Meidan, welcome to Talking Business.
[00:09:55] Business. Good to have you here. here. And maybe explain this first
[00:09:58] first of all, that China is one of of the biggest producers of diesel
[00:10:02] diesel in the world, yet it's enforced enforced an export ban. Why? So I
[00:10:05] I think you have to trace the ban
[00:10:07] ban back to March when the crisis
[00:10:10] crisis first started. And that was
[00:10:11] was about maintaining domestic supply
[00:10:14] supply security as the months went went by and Chinese government realised
[00:10:17] realised that they had enough for
[00:10:19] for domestic supplies, then they they increased exports. Now we're
[00:10:23] we're coming up. Well, this week week is the national holiday. There's
[00:10:27] There's a lot of travel. There's There's a lot of expectations of of more industrial activity in China.
[00:10:30] China. So the government has actually actually put a temporary pause on
[00:10:34] on exports again to maintain domestic domestic supply security. Yeah. And
[00:10:38] And is that about that diesel being being used right now, or is this
[00:10:41] this about making sure that there's there's enough in reserve in their
[00:10:45] their stockpiles to boost them, given given what we've seen in the Middle
[00:10:47] Middle East. Both. So the really really the idea was when refiners
[00:10:51] refiners were allowed to export over
[00:10:53] over the summer, it was on the condition condition that domestic stockpiles
[00:10:57] stockpiles would be enough because because China, like many other countries
[00:11:00] countries around the world and many many other buyers around the world world just don't know how long this
[00:11:03] this crisis is going to last. So
[00:11:06] So what are the implications then
[00:11:08] then for the customers of that Chinese Chinese diesel, particularly? I think
[00:11:11] think the European Union. So the the European Union is sort of a second
[00:11:14] second order effect. The primary primary customers of Chinese exports
[00:11:18] exports are really Asian countries, countries, Singapore. But Singapore
[00:11:21] Singapore is a transit hub. The Philippines, Philippines, Myanmar, Bangladesh,
[00:11:25] Bangladesh, Australia. And so the the impacts are actually quite differentiated.
[00:11:29] differentiated. If you think about about Australia for example needs
[00:11:32] needs diesel but also jet in Bangladesh Bangladesh in lower income countries,
[00:11:36] countries, it's very much about the the running of the economy and people's
[00:11:39] people's daily lives. So they're they're very much suffering from
[00:11:41] from the lack of exports. Now this
[00:11:44] this is a global market. So if Asian
[00:11:47] Asian countries don't have enough, enough, that increases prices from
[00:11:49] from everyone. Europe is impacted impacted because there are higher
[00:11:52] higher prices and because Europe Europe has lost Russian diesel exports.
[00:11:56] exports. And so it's all going into into a global pool that's making
[00:11:59] making prices higher. And there had had been hopes that China may have
[00:12:02] have played a pivotal role in making making sure that there was continuity
[00:12:06] continuity of supply. Are those hopes hopes now dashed with this export
[00:12:10] export ban in place? I think the the export ban is temporary, but
[00:12:13] but I also think we have to sort sort of bear in mind that China is
[00:12:16] is a relatively small exporter of of diesel. Europe is a big is a bigger
[00:12:20] bigger producer as is India, a bigger bigger exporters of diesel. But,
[00:12:24] But, again, every drop matters right
[00:12:26] right now. And is this politics or
[00:12:29] or is it about economics? It's about about logistics of keeping the Chinese
[00:12:32] Chinese economy going. Or is this this about something bigger? Another
[00:12:36] Another front in that big trade war war that China and the US and the
[00:12:39] the European Union and big trading
[00:12:41] trading blocs are facing right now? I think this is very much sort
[00:12:44] sort of energy security and domestic domestic economics and logistics.
[00:12:48] logistics. Chinese refiners demand demand sort of would love to export
[00:12:51] export more because of the prices prices of diesel on the global market
[00:12:54] market are so high, they'd actually actually fetch a nice margin and
[00:12:57] and that would be great for them. them. So they would like to export.
[00:13:00] export. But the government is looking
[00:13:02] looking after the domestic supply supply situation. There's been a
[00:13:06] a lot of talk that China has underused
[00:13:08] underused refining capacity and could could actually increase its refinery
[00:13:12] refinery runs, right? So it could could process more crude and help help out the international market.
[00:13:16] market. Of course, you have to buy buy the crude oil that goes into
[00:13:19] into those refineries, and that's that's quite expensive right now.
[00:13:22] now. And not all of China's refineries
[00:13:24] refineries are able to export. So So it's not a particularly nimble
[00:13:27] nimble or economically efficient efficient system. And we sometimes
[00:13:30] sometimes overlook that. Doctor Michal Michal Meidan, it's good to talk talk to you on the programme this
[00:13:34] this week. Thank you. Thank you. you. So how does all of this tie
[00:13:38] tie together for the global economy economy and those ambitions? Many
[00:13:41] Many politicians have to bring inflation inflation down to the 2% target that
[00:13:45] that is set by their central banks. banks. That would, of course, ease
[00:13:48] ease the cost of living crisis that that millions are facing right now.
[00:13:52] now. I've been catching up with a a renowned economist who was the
[00:13:55] the deputy director of the International International Monetary Fund and is
[00:13:58] is now chief economic adviser at
[00:14:00] at the insurance giant Allianz doctor doctor Muhammed El-Erian, good to
[00:14:04] to talk to you on the programme this
[00:14:05] this week. And we're looking at higher higher diesel prices, higher energy
[00:14:09] energy prices right around the world. world. But let's focus on diesel
[00:14:13] diesel and what impact that has on on the wider economy when prices
[00:14:16] prices are at the sort of levels levels that we're seeing today. It
[00:14:20] It has a huge economic impact, social
[00:14:22] social impact and political impact
[00:14:26] impact economically, everything we
[00:14:27] we buy in a shop has a diesel fuel
[00:14:30] fuel element to it. Transportation Transportation is absolutely key.
[00:14:33] key. That uses mainly diesel farming.
[00:14:35] farming. It is all over the economy. economy. It's a price we don't normally
[00:14:39] normally look at, but now it's the the first price I check every morning.
[00:14:43] morning. It has a social impact too too because it hits the lower income
[00:14:47] income households particularly hard, hard, and then you get the political
[00:14:50] political impact. It adds to this
[00:14:53] this affordability pressure that's that's driving a lot of the politics politics we're seeing around the
[00:14:56] the world. But this is an everyday everyday cost, isn't it? And already
[00:15:00] already coming on top of a cost of
[00:15:01] of living crisis. It is. And it's
[00:15:04] it's ironic because you will hear,
[00:15:06] hear, for example, the US President
[00:15:09] President saying that the tanker tanker flow out of the Middle East
[00:15:12] East is back to pre-war level. And And that's true for crude oil. The
[00:15:16] The problem is refined products. products. And there's two issues
[00:15:19] issues here. One is the flow out
[00:15:21] out is at about 50% of what it was.
[00:15:24] was. And secondly, refineries are
[00:15:26] are not operating the way they should
[00:15:28] should be. So suddenly it is refined
[00:15:31] refined products that become important. important. And the most important important of all refined product
[00:15:35] product is diesel because its impact impact is so widespread. Traditionally,
[00:15:38] Traditionally, of course, central central banks would raise interest
[00:15:40] interest rates to try and keep a a lid on rising prices to tackle
[00:15:44] tackle inflation. But you're suggesting suggesting that this time around
[00:15:48] around it's very different and they they shouldn't do that. First of
[00:15:51] of all, it won't do anything for
[00:15:52] for the supply of diesel. Second,
[00:15:56] Second, it's the wrong policy response. response. The right policy response
[00:16:00] response is a fiscal adjustment and and the advantage of a fiscal adjustment
[00:16:04] adjustment is it helps a second price. price. That's really problematic problematic all over the world right
[00:16:08] right now. And that is government
[00:16:10] government bond yields, which defines
[00:16:13] defines what our mortgages cost, cost, how much corporate lending
[00:16:16] lending costs. So if the government government doesn't reduce its claim,
[00:16:19] claim, we're going to see interest interest rates continuing to go up.
[00:16:22] up. And that's going to add yet another another leg to the affordability
[00:16:26] affordability crisis that a lot of of people are feeling. And which which taxes would you look at changing
[00:16:30] changing as part of that fiscal response?
[00:16:33] response? So it varies enormously enormously from country to country.
[00:16:37] country. In some cases, you're able
[00:16:39] able to raise the income tax on the
[00:16:42] the wealthiest part of the population.
[00:16:45] population. In other cases, like like the UK, there's a case for an
[00:16:49] an extra levy on banks. It really
[00:16:51] really does vary from country to
[00:16:53] to country. And many of these countries
[00:16:56] countries can benefit from more efficient efficient and rational expenditure.
[00:17:00] expenditure. You know, I'm not saying saying it's easy. It requires political
[00:17:04] political leadership, but better
[00:17:05] better do it now than when you have
[00:17:08] have a crisis. And if you look around around the world, there are three
[00:17:12] three G7 economies that are particularly particularly vulnerable. And who who would have thought a G7 economy
[00:17:15] economy would be vulnerable? And And that is France. We see what's what's happening in France, Japan
[00:17:19] Japan and the UK. You say that better
[00:17:22] better to do now than before. We're We're in a crisis. Is this not a
[00:17:26] a crisis already. By a crisis I mean
[00:17:30] mean that financial instability and
[00:17:34] and prices start hurting the real real economy in a fundamental way.
[00:17:38] way. So let's assume that these affordability
[00:17:41] affordability pressures persist. persist. What's going to happen? happen? What economists call demand
[00:17:45] demand destruction. People will buy
[00:17:47] buy less, people will not be able
[00:17:49] able to afford what they have. Companies
[00:17:52] Companies seeing this will invest invest less. And next thing you know, know, you're getting closer to either
[00:17:56] either stall speed, meaning the economy
[00:17:58] economy slows down and is very, very
[00:18:01] very exposed to recession. We don't don't want to get there. So what
[00:18:04] what is the solution here? What happens happens next? They take a page from
[00:18:07] from what you've been advocating advocating to others for such a long
[00:18:11] long time. Fiscal responsibility
[00:18:13] responsibility matters. Economic Economic growth matters, productivity
[00:18:17] productivity growth matters. And And this all can be done through
[00:18:19] through policies. It just requires requires political leadership. Doctor Doctor Muhammed El-Erian really good
[00:18:23] good to talk to you. Good to get get your insight this week. Thank
[00:18:26] Thank you so much. Thank you. Still
[00:18:28] Still to come after the break why
[00:18:30] why Made in Berlin is music to Chinese
[00:18:32] Chinese ears. The boss of a top German
[00:18:35] German audio firm tells me why high
[00:18:37] high end prices aren't drowning his his company out of a competitive
[00:19:41] will it all mean for Europe's economy? economy? That's this week on Talking
[00:19:45] Talking Business here on BBC News.
[00:19:58] News. Welcome back to Talking Business. Business. Now if you think of home
[00:20:01] home audio products, you may think
[00:20:03] think of China and no wonder it's
[00:20:06] it's estimated 80% of such products
[00:20:08] products are manufactured there. there. But there are exceptions.
[00:20:11] exceptions. Burmester is one of Germany's Germany's best known high end audio
[00:20:14] audio brands. It makes all of its its products in Berlin and sells
[00:20:17] sells them all over the world, even
[00:20:20] even in China. But China's domestic
[00:20:22] domestic brands are becoming increasingly
[00:20:25] increasingly innovative and so can can European manufacturing and heritage
[00:20:29] heritage compete with a new high high tech players? I've been speaking
[00:20:32] speaking to Burmester chief executive executive Thorsten Poenig. Welcome
[00:20:35] Welcome to Talking Business. Good Good to have you here. And look,
[00:20:38] look, if someone's not heard of the the company, what is it that you
[00:20:41] you do? Burmester is or has the privilege
[00:20:45] privilege for almost 50 years now
[00:20:46] now to build some of the most sophisticated
[00:20:50] sophisticated and prestigious stereo stereo systems in the world, equipping
[00:20:54] equipping some of the most beautiful beautiful cars in the world with
[00:20:57] with sound, with music. That's what
[00:20:59] what we do from a source, a device
[00:21:02] device to a speaker. And who are are you selling them to? Because
[00:21:05] Because already I get a sense that that these don't come cheap, do they?
[00:21:08] they? They come with a lot of quality quality and this quality comes at
[00:21:12] at a certain price. That's correct. correct. Nevertheless, the let's
[00:21:15] let's say the bandwidth of customers
[00:21:17] customers is huge. We have very wealthy wealthy people, of course, among
[00:21:21] among our customers, but we also also have people in them always proud
[00:21:24] proud when I see this that come here here with their kind of working gear
[00:21:27] gear and they really save their money money to be able to afford a component
[00:21:31] component or a system of ours to to enrich their life with the way way they want to experience their
[00:21:35] their music with. OK, so tell me me if I brought my car to you and
[00:21:38] and I said, kit it up with a good good sound system. Torsten how much
[00:21:41] much is it going to set me back roughly? roughly? Well, it sets you back the
[00:21:44] the entire price of the car because because we are not doing anything
[00:21:48] anything after sales. We are supplying
[00:21:52] supplying Mercedes AMG, Porsche Maybach,
[00:21:56] Maybach, Ferrari with systems and and they are built in from the factory.
[00:22:00] factory. But we are not doing any any after sales systems. So I regret
[00:22:04] regret when you will have to go with with a completely new car. OK, I
[00:22:06] I take your point. Maybe I can't can't afford the car, but you know,
[00:22:09] know, give me a sense. What does does a system like this cost? How
[00:22:13] How much would it set me back? The The surcharge of Burmester system
[00:22:16] system in a car is between 1,000
[00:22:20] 1,000 and 8 or 9000. So it's a lot
[00:22:23] lot less than actually than the home home components or the integrated
[00:22:26] integrated components that we're we're that we are doing. But it's it's a completely different system.
[00:22:30] system. It's a completely different different quantity, of course. And
[00:22:32] And as well as cars, you put them them in people's houses as well.
[00:22:35] well. And that's an important market market for you, isn't it? It is.
[00:22:38] is. It is where we are coming from from actually. And today we're one
[00:22:41] one of the few companies that is
[00:22:44] is supplying and manufacturing every every type of device in this industry,
[00:22:47] industry, from a turntable to speakers
[00:22:49] speakers to amplifiers to music servers.
[00:22:52] servers. Basically anything. Where Where in the world are you selling
[00:22:55] selling as well? Where are your customers customers right now? I guess there
[00:22:58] there are audio lovers all over the the world, but where are key markets
[00:23:01] markets for your business? Since Since Germany is our domestic market,
[00:23:04] market, Germany is still a relevant
[00:23:06] relevant market for US, but it has
[00:23:09] has been outrun by the United States
[00:23:13] States and especially by China. Asia Asia in general is a very strong
[00:23:16] strong region for us. We have founded founded our own entities in the United
[00:23:20] United States and this year also also in China to expand our business
[00:23:23] business there and fulfilling the the promise that comes with Burmester
[00:23:26] Burmester when it comes to experience experience also around the product,
[00:23:30] product, we had to go this step. step. How challenging is the Chinese
[00:23:34] Chinese market for you, though, as as an outsider going to a place that
[00:23:37] that I think makes about 80% of the
[00:23:40] the world's audio equipment. It is
[00:23:41] is a very tough market to be in.
[00:23:44] in. Luckily, the Chinese customers customers appreciate the quality
[00:23:47] quality that we are providing and and the challenge comes with the
[00:23:51] the lack of patience of the customers. customers. The Chinese customers,
[00:23:54] customers, more than any other customer
[00:23:56] customer in the world, wants to be
[00:23:59] be quick with getting his or her her individual product. So also in
[00:24:02] in order to adapt to this demand,
[00:24:06] demand, we had to found our entity
[00:24:07] entity there. And do you worry that
[00:24:10] that as a business trading with the the US and China, but being based
[00:24:13] based there in Europe, you end up up getting caught up. You're collateral
[00:24:17] collateral damage in the huge trade trade disputes between three huge
[00:24:20] huge trading blocs. We don't know know what the future brings. Of course, course, you're right. There is a
[00:24:24] a lot of tension when it comes to
[00:24:25] to this. What I can say at the moment
[00:24:28] moment is that it's running very
[00:24:30] very well. Also on a daily basis
[00:24:33] basis when it comes to financial financial transactions, when it comes
[00:24:36] comes to delivering shipping products
[00:24:39] products everything is well in place
[00:24:41] place and things down there are running
[00:24:45] running well. When you adapt to the
[00:24:48] the rules and this is what we do do right now. Those threats of things
[00:24:52] things like tariffs from the White White House have a big effect on
[00:24:55] on firms that are importing and exporting. exporting. I mean, what has it meant
[00:24:58] meant for you? For US, the situation
[00:25:02] situation turned out positively because
[00:25:05] because our the category of products products that we are doing is at
[00:25:08] at a 10% tariff and we could compensate
[00:25:12] compensate this in the market through
[00:25:13] through adapting prices through taking
[00:25:16] taking some of the tariffs and on
[00:25:19] on our shoulders. So the growth in
[00:25:22] in the market and the still existing
[00:25:24] existing high demand for our product
[00:25:28] product over there. Made this situation
[00:25:31] situation by far not as serious as
[00:25:35] as we were fearing it initially. initially. Thorsten Poenig really
[00:25:38] really good to talk to you on the the programme this week. My pleasure.
[00:25:42] pleasure. Thanks for having me. That's That's all for this week. You can can keep up to date with all the
[00:25:46] the latest on the global economy economy on the BBC News website and
[00:25:49] and app. But until next time, thanks thanks for watching and we'll see
[00:25:52] see you soon. Bye-bye.
[00:29:31] MUSIC
[00:29:44] Being able. To inspire someone
[00:29:46] is always the greatest joy. I saw saw Souza one
[00:29:54] Saw Souza one time at the Grammys and she said that she studied studied some of my songs for their
[00:29:58] their songwriting, and I thought thought that that was the biggest biggest compliment ever. My support support for Ukraine is unwavering.
[00:30:01] unwavering. It is 100% when the big
[00:30:02] big names talk, they talk to us.
[00:30:08] us. MUSIC
[00:30:14] MUSIC Live Live from London. This is BBC News.
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