After three remarkably dynamic years, the momentum has now slowed down, and the demand engine is no longer pulling as powerfully. However, this has its advantages for truck buyers. Manufacturers must keep the rise in prices in check, and waiting times for a new vehicle have shortened. A year ago, it took six to twelve months or more from order to delivery. This spring, depending on the model, it was an average of three to five months, as reported by Inka Koljonen, the CFO of MAN, in early March.

Even in the short term, smaller orders can now be fulfilled quickly. „If a customer needs more, we can react“, says Martin Daum, CEO of Daimler Truck. For months now, normalisation has been the buzzword in the truck industry. The backlog caused by semiconductor shortages, and a variety of other components, has dwindled.

Compared to the economic lows of previous years, the situation for the industry is still quite comfortable. Christian Levin, CEO of the Volkswagen Commercial Vehicles holding company Traton, speaks of a normalisation at a solid level. Volvo CEO Martin Lundstedt also commented that „demand has further normalised in many markets at a good level.“ To maintain this, however, a revival of demand in the second half of the year would be necessary in Europe. The industry still expects just that.

If the revival does comes, the forecasts could be met. Daimler Truck expects a decline in the market for heavy trucks in Europe by about 12% to 24% this year. That would be 260,000 to 300,000 vehicles sold, compared to 342,000 last year. Including the small and medium classes – Traton includes these – the 2023 number increases to 387,000. Based on these figures, Traton expects 5% to 15% less this year.

In North America, Daimler Truck expects a decline from 331,000 heavy trucks sold last year to 280,000 to 320,000. That would be 3% to 15% less. Traton estimates a 5% to 15% decrease in North America for the broader market. 445,000 units were sold in 2023.

However for South America, the Munich-based company's forecast goes from level with last year to plus 10%. Business is brisk in Brazil, the largest market on the continent. It had shrunk in 2023 after there were pre-purchase effects due to stricter emission standards. Now it's going vigorously in the other direction.

Customers in Europe are holding off on purchasing trucks. In the recently increasingly cloudy economic environment, they are hesitating to invest, reports a spokesman for MAN, one of Traton's four brands. Daimler Truck CEO Daum recently put it succinctly. „Many negotiations, no deals at the moment – that's the summary of our customer relationships," he said.

The weakness in Europe could spread, contrary to expectations. However, the industry doesn't seem to be worried about that. The companies have strengthened their much-vaunted resilience. Costs have been cut. In addition, the manufacturers rely on flexible production networks. MAN completed a restructuring programme last year, involving a reorganisation of the international manufacturing network, and job cuts. It wasn't the first programme of its kind, but now profitability is expected to remain at a satisfactory level even in difficult times.

According to its own assessment, MAN is „significantly more robustly positioned than in previous years.“ Furthermore, the Munich-based company responded to inquiries by stating that they had proactively responded to the decline in demand for trucks in production. Measures such as flexitime and adjusting shifts were used for this purpose. The latter includes reducing work shifts.

Similar measures are to be seen at Daimler Truck, who say that "we can adjust our production shifts at short notice as needed.“ Examples of measures include different working time models and worker time accounts. In addition, production-free days are planned around holidays and bridge days. But this is part of the usual programme planning, and has also been used in previous years.

„Flexible production is nothing new for us – it´s in our DNA", says CEO Daum. What worries him more is the transition to emission-free power drives. „We don't know which technology will prevail.,“ he says. This is primarily a question of available green energy.

In the first three months of this year, Volvo gradually reduced production capacity in Europe. A balance is to be reached again in the current quarter. The Volvo subsidiary Mack Trucks in North America, on the other hand, continued to accept orders only restrictively. The order backlog there extends further than in Europe. Volvo partly attributes this to strikes in November of last year. This had shifted the production of already sold trucks into 2024.

In terms of resilience, Daimler Truck says that it is determined to improve its ovarall resilience, to ensure healthy performance. The company relies "on continuous fixed cost management and measures for targeted efficiency improvement to reduce costs and increase profitability.“

In addition, the industry is benefiting from the booming bus segment business. During the Covid pandemic, the sale of coaches almost came to a standstill. This sector has been recovering for some time. In the first quarter of 2024, for example, Daimler Buses increased sales by 24% and adjusted EBIT from 1% one year ago to 5%.

MAN also reports an unchanged high demand in the other two business areas, vans, and engines. The engine product range includes diesel and gas engines – in addition to commercial vehicles also for agricultural machinery, rail, and water vehicles, as well as power generation and combined heat and power generation. This helps to cushion the current weakness in the truck segment somewhat., the company says.

According to stock analysts, the industry weakness will not last long. DZ Bank experts expect a new upturn cycle in demand after the transition year 2024. Analysts from Jefferies expect high growth. The rationale from both is that stricter emissions standards in the US and Europe will prompt customers to make purchases in the coming years.

In the EU, heavy trucks and buses newly registered from mid-2028 will be expected to emit fewer pollutants than before. Euro 7 emissions standards will apply, which will make the vehicles more expensive as a side effect. In the US, the Environmental Protection Agency (EPA) has set new regulations for the model years 2027 to 2032.