Struggling US Truck Sales Weigh Heavily on Daimler Truck Corporation
In the trucking industry, the American economy remains a source of uncertainty, with mixed signals and a cautious outlook. The economy shrank slightly in Q1 2025 but rebounded in Q2, primarily due to lower imports rather than stronger domestic demand. Despite these mixed signals, recession odds have dropped but remain significant at 40% by 2026.
This economic environment has heavily impacted Daimler Truck, a market leader in the North American heavy truck segment (Class 8) with a 41.1% share. In Q2 2025, Daimler Truck North America's profits fell 61% year-over-year, driven by a steep slump in sales and orders amid weak freight demand and a volatile market. The company's net income dropped from $900.8 million in Q2 2024 to $353.9 million in Q2 2025, and revenues declined 5% year over year to $14.41 billion.
CEO Karin Rådström described the current market as highly uncertain and volatile, with increased doubts about economic growth, pre-buy cycles, and overall demand. This uncertainty prompted Daimler Truck North America to lay off around 2,000 production staff across five sites in mid-2025 as an operational adjustment to the stretched freight market conditions.
In addition, Daimler Truck announced about 5,000 job cuts in Germany and plans to grow its defense business to counterbalance volatility in commercial markets. The Stuttgart-based company's Trucks North America achieved an adjusted operating margin of 13.7% in the first half of the year, but the order intake for Daimler Truck in the North American heavy truck segment decreased by more than half in the second quarter.
To address these challenges, Daimler Truck is currently implementing an efficiency program to reduce costs in Europe by more than 1 billion euros by 2030. For the group margin in the industrial business (excluding financial services), Daimler Truck now expects 7 to 9%, down from 8.9% last year. The company has also lowered its forecast for the North American heavy truck market, affecting the group's sales, revenue, earnings, margin, and free cash flow.
The analysis firm Bernstein noted that many had expected a downward revision, but the extent was a negative surprise for most. The uncertainty about the economy could make it difficult for customers to predict future transport volumes and align their investments accordingly. As a result, Daimler Truck has reduced its full-year guidance globally and in North America due to this persistent market weakness.
In Xetra trading, Daimler Truck's share price was 7.6% below the previous day's close. Despite these challenges, CEO Rådström remains optimistic, stating that customers are very concerned about the American economy. However, she also confirmed that there is an agreement with the works council to reduce costs, and assumes that this will result in a reduction of about 5,000 jobs.
[1] Source: Bloomberg, "American Economy: Uncertainty Remains High Despite Q2 Rebound" [2] Source: Reuters, "Daimler Truck North America Profits Plummet in Q2 2025" [3] Source: The Wall Street Journal, "American Recession Odds Drop, but Remain Significant" [4] Source: Automotive News, "Daimler Truck North America Announces Job Cuts and Cost Reductions in Response to Market Weakness"
- The mixed signals and cautious outlook in the American economy have negatively impacted Daimler Truck's business, with profits falling heavily in Q2 2025 due to weak freight demand and a volatile market, as finance costs also play a role in the company's operations.
- In response to the uncertain and stretched market conditions, Daimler Truck is undertaking cost reduction measures, including job cuts and an efficiency program, with the aim to counterbalance the volatility in the business segment and improve its financial performance in the face of economic uncertainty.
