Daimler Trucks announced, as a result of the world’s major truck markets being in a period of sustained contraction, it has adjusted its outlook for this year.

Daimler Trucks said it now expects EBIT 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 ($3.03 billion).

Dr. Wolfgang Bernhard, member of the board of management of Daimler AG and head of the Daimler Trucks and Daimler Buses divisions, said: “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 clear market leadership with its strong product portfolio. At the same time, there has been no revival of orders received, especially in the heavy-duty segment (Class 8). 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. 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 are 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, as a result, the economic situation there has deteriorated once again. The same applies to Indonesia, where Daimler Trucks anticipates a decrease of about 15%. Demand in Turkey also will be substantially lower than last year, due not only to purchases being brought forward to 2015, but also to very negative geopolitical conditions.

Against the backdrop of this development, Daimler Trucks will intensify the efficiency actions that are already being taken. In Brazil, further workforce adjustments will have to be made, for which Daimler Trucks has made a voluntary severance offer. In this context, Daimler Trucks anticipates expenses totaling up to €100 million ($112.1 million) as a special reporting item in 2016.

However, nothing has changed with regard to the medium- and long-term growth drivers and success factors for the key markets of Daimler Trucks.

“Along with managing volatile truck markets, we continue to pursue our strategy systematically. With our technologically leading position, global presence and intelligent platform concepts, we will take further determined measures also in the future,” said Bernhard.

Daimler continues to assume that group EBIT from the ongoing business will increase slightly in the year 2016.