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Daimler Truck Lowers 2025 Outlook Due to U.S. Tariffs and Market Uncertainty
Daimler Truck, a major player in the global trucking industry and a member of the DAX index, has revised its 2025 outlook following the impact of U.S. tariffs and ongoing market uncertainty.
CEO Karin Radström announced the new revenue expectation for the industrial business, stating that the company now expects revenue of €44 to €47 billion by 2025, excluding financial services. This is a significant decrease from the earlier outlook of €48 to €51 billion, revised only a few months ago in mid-May.
The decline in order intake, according to CFO Eva Scherer, reflects the ongoing market uncertainty caused by U.S. tariffs. The tariffs have led to increased input costs, particularly for imported materials like aluminum and steel in North America, the company's most profitable market.
This market uncertainty has caused customers to delay orders, with CEO Radström noting that the tariffs themselves are not the biggest issue, but rather the uncertainty they create. The weak demand, particularly in North America, has led to a revised unit sales forecast for 2025, with sales expected to range between 410,000 and 440,000 units, down from the earlier outlook of 430,000 to 460,000 units.
To address these challenges, Daimler Truck is implementing cost-cutting measures, including plans to reduce around 5,000 jobs in Germany by 2030. The company is also focusing on long-term resilience through cost discipline, modular technology, innovation in electric and vocational trucks, and a "Cost Down Europe" program aimed at boosting competitiveness despite near-term market difficulties.
The stock of Daimler Truck fell by three percent after hours following the revised forecasts, reflecting investors' concerns about the company's revised outlook. Despite the current challenges, Daimler Truck remains committed to recovery beyond 2025, with a focus on strategic cost-cutting and innovation efforts.
In the aftermath of the revised outlook, Daimler Truck's North American operations are being assessed as weaker, with significant declines in sales. For instance, U.S. sales fell 14%, Canada 21%, and Mexico 79% compared to the earlier outlook.
In conclusion, the ongoing uncertainty caused by U.S. tariffs has contributed to increased input costs and market uncertainty, prompting Daimler Truck to revise its 2025 annual outlook downward in terms of earnings, sales volume, and profitability. The company is responding with strategic cost-cutting and innovation efforts aimed at recovery beyond 2025.
Other industries, beyond the trucking industry, might also be affected by the increased input costs due to U.S. tariffs, given the wide usage of aluminum and steel in various business sectors.
The revised 2025 outlook for Daimler Truck, with lower revenue and sales volume expectations, might impact the broader finance industry as concerns over the company's recovery beyond 2025 could affect investor sentiments and financial markets.
