Daimler Sees NAFTA Class 6-8 Market Dropping 15%

May 20, 2016

By David Cullen

Citing “sustained contraction” of global truck markets— including North America-- Germany’s Daimler Trucks has adjusted its 2016 outlook. The OEM now expects its operating earnings will “significantly lower” this year vs. “the very good levels of last year.” On the other hand, the company added that its profitability this year will “remain very high.” 

While stressing that it is “defending its clear market leadership” in the NAFTA market, Daimler Trucks pointed out that “at the same time, there has been no revival of orders received, especially in the heavy-duty segment (Class 8).” 

In a May 19 press release, the parent company of Freightliner and Western Star said it now forecasts that the overall North American market for Class 6 to 8 trucks will “contract by approximately 15% in 2016.” 

The Germany-based OEM said the drop-off across the Atlantic can be offset only partially by a rising European truck market.

“Although demand in Europe is significantly higher than last year, the competitive situation has become much more intense and is influencing market players’ pricing,” the company stated. “Another factor is that the persistently low price of oil is having a sustained negative impact on [truck] demand in the Middle East.”

Daimler also said the outlook for developing markets in Brazil, Indonesia and Turkey has been “worsening since the beginning of the year and continues to worsen.”

It expects the Brazilian market will contract by about 20%, thanks to the “political and thus also [the] economic situation” again deteriorating there. As for Indonesia, Daimler expects to see a decrease of about 15%. The OEM also sees “substantially lower” demand in Turkey, due both to purchases being brought forward to 2015 and the “very negative geopolitical conditions” in place.

“The situation of global truck markets has been challenging for several months and has recently got worse,” stated Wolfgang Bernhard, Member of the Board of Management of Daimler AG and Head of the Daimler Trucks and Daimler Buses divisions. 

“Especially in the NAFTA region, but also in the Middle East, demand is weaker than previously expected,” he continued. “We have therefore adjusted our outlook for the rest of this year. Although the forecast is for lower numbers than in 2015, we continue to anticipate a high level of earnings in the full year.”  

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