VW's Traton slashes 2025 outlook as US uncertainty weighs on demand
Traton now expects unit sales and revenue to decline by up to 10%, compared to its previous forecast between a 5% drop and 5% growth. It also cut its target for adjusted operating return on sales to 6-7% from 7.5–8.5%.
The downgrade came despite an improvement in first-half orders, which rose 11% year-on-year to 139,600 vehicles, driven primarily by demand for replacement vehicles in Europe.
"There is no evidence yet for a sustained turnaround in the European market," CFO Michael Jackstein said in a conference call.
Traton said the economic situation in Europe remained weak, while North American truck buyers continued to show caution and demand in Brazil stayed subdued.
"Visibility is low in most regions," said analyst Fabio Hoelscher from Warburg Research.
Pal Skirta, equity analyst from Metzler Equities, said that Traton's recovery depended heavily on U.S. tariff policy. Without a trade agreement between the U.S. and its key partners, heavy-duty truck demand is unlikely to rebound, keeping pressure on capacity utilization and pricing at Traton's International Motors brand, he added.
The U.S. market remains a key concern for German automakers, who are lobbying for a trade agreement to replace the 25% tariff on car and parts imports. The levy has dampened demand and competitiveness in the region.
Hopes for progress have been buoyed by Japan's recent success in striking a similar deal with Washington, raising expectations for a breakthrough with Europe.
European truck makers Daimler Truck and Volvo have been signalling sluggish demand in North America. However, Volvo surprised markets last week with stronger quarterly earnings, suggesting recovery signs in Europe.
Traton, which also owns the Scania and MAN brands, posted a 33% year-on-year drop in its adjusted operating result to 1.4 billion euros ($1.64 billion) alongside a 6% decline in its half-year revenue to 21.9 billion euros.
Volkswagen, which owns more than 87% of Traton's shares, also cut its full-year guidance on Friday after taking a $1.5 billion tariff hit in the first half of 2025.
($1 = 0.8512 euros)
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