VW’s Traton sees tepid truck market in 2025, shares fall

A cautious sales outlook for the commercial vehicle market in 2025 amid a weak global economy sent shares of Volkswagen's truck unit Traton falling on Monday.

The Scania owner's shares were down 5% at 1055 GMT, also dragging down peers Daimler Truck and Volvo.

The truck maker forecast 2025 sales to range from -5% to +5% with an operating return on sales of between 7.5% and 8.5%, expecting a stronger truck market in the second half of 2025.

Traton said it did not see a significant impact from U.S. tariffs on imports from Mexico in the short term, even as 65% of the trucks it supplied to the United States last year were assembled at its Mexican plant.

European truck makers' shares have risen this year on hopes for higher order books ahead of U.S. tariffs coming into effect, decisions to move more production to the Unites States and an improving European outlook.

The region's truck makers struggled through last year amid falling sales, after pent-up demand following the pandemic drove them to record highs in 2023.

Sweden's Volvo in January reported a strong order intake for the fourth quarter, which some analysts said might be a sign of brightening outlook for the European truck market.

Traton's fourth-quarter orders also rose but the German-headquartered group is not declaring a turnaround in Europe, J.P.Morgan analysts said in a note.

Adjusted operating return on sales, Traton's main profitability metric, rose to 9.2% in 2024, exceeding the 2023 figure and its forecast, thanks mainly to efficiency measures even as vehicle sales fell.

The owner of MAN truck brand hiked its dividend by 13% to 1.70 euros per share, raising the total payout to 850 million euros, most of which will go to Volkswagen which owns almost 90% of the shares.

Sales of electric vehicles dropped by almost a fifth, reducing EVs' share in overall sales from 0.6% to 0.5% and increasing the risk of Traton not meeting carbon emission reduction targets.

Traton's results come as Volkswagen undergoes a major restructuring with thousands of job cuts in Germany due to shrinking European demand, rising competition from China and uncertainties around the EV transition.

($1 = 0.9223 euros)