Daimler Truck reports sharp profit decline in first quarter – Group expects improvement

Profit had dropped significantly in the first quarter. Daimler Truck primarily produces heavy and medium-duty trucks under the Mercedes-Benz and Freightliner brands, as well as buses. The North American business is considered the most important sales market for the group's heavy-duty trucks.

Despite the current slump, the company is confident that business will improve noticeably. Order books have recently filled up again, the company said. Production at the plants is also expected to be ramped up again in the coming months.

Causes of the Slump

The US market for heavy-duty trucks had cooled significantly after the boom during the Corona pandemic. Many freight carriers and fleet operators had expanded their vehicle fleets at the time and are now holding on to their existing stock. The weaker economy in the USA is increasing the pressure on manufacturers.

Daimler Truck also manufactures vehicles and components in Brandenburg. The site is considered an important part of the European production structure. If the North American business recovers, production in Germany could also benefit.

On the stock exchange, investors reacted cautiously to the quarterly figures. Daimler Truck's share had already lost value before the results were published. Analysts pointed out that expectations for a rapid recovery in the US market had been dampened.

Outlook and Strategy

In recent years, the company had benefited strongly from demand for vans and trucks. The current weak phase in its most important market now highlights the company's dependence on economic developments in North America.

With a view to the full year, Daimler Truck is sticking to its forecast. Accordingly, revenue in the industrial business is expected to rise slightly and the adjusted return on sales to fall within a certain range. The group intends to review its final annual targets once further quarterly figures are available.

For the coming months, the company announced that it would adjust production to match demand. In addition, new models and electrified vehicles are intended to support sales. Daimler Truck is investing billions in the development of battery-electric and hydrogen-powered trucks.

Observers see the profit slump less as a structural problem and more as a cyclical dip. The order situation has recently stabilized, pointing to an impending recovery. Nevertheless, the situation on the US market remains tense.

Overall, the situation remains challenging for Daimler Truck. The group is relying on rising demand in Europe and the expected recovery in North America to support business in the further course of the year.