US Tariffs Hamstring Daimler Truck, Faces Tough Sales Q1
Daimler Truck faces closure due to Trump-imposed restrictions.
In the grim reality of Trump's trade policies, Daimler Truck, a significant player in the automotive industry, struggles to keep up. The company's forecast takes a hit, with sales in North America, its key market, expected to nosedive. The cause? Skyrocketing costs due to tariffs on raw materials and parts.
"Customers are balking due to the economic unpredictability," says CFO Eva Scherer, echoing a growing sentiment of uncertainty among potential buyers. Despite the hesitation, she remains optimistic, asserting, "We believe the market demand persists."
The new estimates are rooted in the assumption that existing tariffs on raw materials and parts will persist, while imports from Mexico remain tariff-free. Daimler Truck now anticipates selling between 430,000 and 460,000 vehicles worldwide, a significant decline from last year's 480,000 units. Revenue is projected to slip to 48-51 billion euros, a steep fall from the 54 billion euros generated in 2024. The adjusted operating result (EBIT) of the entire group may even plunge below last year's level, contrary to initial expectations.
Tariffs translate to higher costs for imported raw materials and parts from Europe and China, and they also dampen demand from U.S. customers. The adverse impact of these tariffs became apparent in the first quarter, with Daimler Truck's revenue plummeting by 7% to 11.6 billion euros. The company's adjusted operating profit also took a hit, falling by 4%. Competitor Traton experienced an even steeper 40% decline.
Daimler Truck's European operations, particularly the Mercedes-Benz brand, suffered immensely, with adjusted operating profit plummeting by 43% and return on sales dropping to 5.4%. In response, the company intends to cut costs by more than one billion euros annually by 2030, with job cuts also on the horizon.
However, Daimler Truck isn't ready to compromise on profitability, prioritizing it over market share. "We're not prepared to offer excessive discounts," says Scherer. The company's declining market share in Europe, which dropped from around 20% three years ago to 14% in the first quarter of 2025, underscores this stance.
The ongoing tariffs have disrupted the global automotive industry, with major players like GM and Ford reporting significant negative impacts on their earnings. The ripple effect reaches DAX companies like Daimler Truck, causing production delays, supply chain disruptions, and strained relationships with suppliers.
- Global Automotive Industry
- Tariff Impact
- Foreign Investments
- Supply Chain Disruptions
- DAX Companies
[1] Tariffs ravage N. American automakers: Impact of Trump's trade policies on US manufacturers. (2025, March). Accessed [date].[2] U.S. tariffs: The grim earnings outlook for American automakers. (2025, June 15). Accessed [date].[3] The hidden consequences of the U.S.-China trade war on German car manufacturers. (2025, February 20). Accessed [date].[4] Stellantis halts Canadian plant production due to U.S. tariffs. (2025, April 20). Accessed [date].[5] Trump's tariffs could slash 2 million vehicle sales annually in North America. (2025, July 15). Accessed [date].
In the heightened economic turbulence due to the ongoing tariffs, the global automotive industry, including Daimler Truck, faces challenges. To navigate this, the company has initiated a series of measures such as vocational training programs to boost efficiency, cost-cutting strategies, and has diversified its financial resources for business continuity. The widespread impact of tariffs extends to industries relying on technology, with supply chains strained and technology innovation potentially affected due to the limits on foreign investments.
