Daimler Trucks Lowers Financial Outlook for 2016

Major truck manufacturer, Daimler Trucks, has adjusted its outlook for the company’s financial performance in 2016.  

Daimler Trucks now expects EBIT (earnings before interest and tax) from the ongoing business and unit sales to be “significantly lower in 2016 than the very good levels of last year.” In 2015, Daimler Trucks achieved the best EBIT in its history of €2.7 billion.

The company did note that “profitability this year is to remain very high also after the adjusted outlook.”

Dr. Wolfgang Bernhard, Member of the Board of Management of Daimler AG and Head of the Daimler Trucks and Daimler Buses divisions, stated: “The situation of global truck markets has been challenging for several months and has recently got worse. Especially in the NAFTA region, but also in the Middle East, demand is weaker than previously expected. 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. 2016 will be one of Daimler Trucks’ most profitable years, due not least to the successful continuation of our efficiency actions.”

In recent weeks, the situation in major markets has changed significantly.

In the NAFTA region, Daimler Trucks is defending its market leadership with itsproduct portfolio. At the same time, there has been no revival of orders received, especially in the heavy-duty segment (Class 8). As the company stated: “The overall market for Class 6 to 8 trucks will contract by approximately 15% in 2016. This can be only partially offset by the market development in Europe.”

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

Furthermore, the development of markets in Brazil, Indonesia and Turkey is negative. The outlook for those markets has been worsening since the beginning of the year and continues to worsen. The Brazilian market will contract by about 20%, now that the political and thus also economic situation there has deteriorated once again. The same applies to Indonesia, where Daimler Trucks anticipates a decrease of about 15%. Demand in Turkey will also be substantially lower than last year, due not only to purchases being brought forward to 2015, but also to very negative geopolitical conditions.

Category: Featured, General Update