Daimler Trucks has turned sour on the trucking market, especially in North America.
The division of German automaker Daimler AG said Thursday it is revising its 2016 financial forecast because of slowing sales.
The truck manufacturer said its operating profit will be “significantly below the very good prior-year levels.” Previously Daimler Trucks had said it was expecting an operating profit about the same as last year’s business.
Daimler Trucks achieved record earnings of 2.7 billion euros and sales of 502,500 vehicles last year.
“The situation of global truck markets has been difficult for several months and has worsened in recent weeks,” the company said in a statement. “In North America, there has been no revival of orders received, especially in the heavy-duty segment.”
Daimler said the market for trucks in the Class 6 to 8 weight segments will contract by about 15 percent in 2016. Daimler sells trucks under the Daimler, Freightliner, and Western Star names in the U.S.
“While the news is certainly negative, this reduced outlook does not come as a surprise given the weak year-to-date order data in Class 8 trucks and due to the fact that we believe Daimler’s prior guidance was somewhat optimistic,” said Michael J. Baudendistel, an analyst at Stifel Transportation & Logistics Research Group.
Stifel is forecasting 2016 Class 8 production of 230,000 vehicles in North America, down nearly 30 percent from the 323,000 trucks manufactured in 2015.
Others are seeing a slowdown in North America.
Orders for Class 8 trucks in April plunged 16 percent from the prior month, and are down 39 percent from April of a year ago, to a total of 13,676 units, ACT Research reported Wednesday.
Medium duty truck orders totaled 20,880 units, down 7 percent from the prior month, the research firm said. But they were up 16 percent from April of 2015.
“For Class 8, U.S. tractors and the Canada market continue to represent the weakest market segments, while orders from Mexico remained the brightest spot,” said Kenny Vieth, ACT’s president.
The firm has forecast North American production of 236,522 vehicles, slightly above Stifel’s estimate.
Daimler said the “persistently low price of oil is having a sustained negative impact” on truck sales in the Middle East.
Economic issues in Brazil, Indonesia and Turkey also are hurting truck demand.
“The outlook for those markets has been worsening since the beginning of the year and continues to worsen,” Daimler said. “The Brazilian market will contract by about 20 percent, now that the political and thus also economic situation there has deteriorated once again.