Equipment

Daimler Truck leaders counting on improving supply chain to put up 2023 growth

March 13, 2023

Chairman Martin Daum says the new Western Star 57X is ‘really rocking its segment.’ DTNA expects to sell around 200,000 vehicles this year, but that estimate could depend on supply chain problems and to what degree they persist.

Geert De Lombaerde

Daimler Truck North America executives are forecasting that sales could grow 12% this year from a strong 2022 base—if the supply chain plays nice.

Speaking to analysts and investors after Jochen Goetz, CFO of DTNA’s parent company Daimler Truck Holding AG, said North American sales in 2023 are expected to be in a range of 190,000 to 210,000 units while margins are forecast to come in between 10% and 12%, neatly bracketing 2022’s 10.7%.

DTNA's Freightliner and Western Star nameplates sold nearly 187,000 units last year, an increase of 15% from 2021. Strong pricing power in the face of enduring demand–Goetz said it’s still the case that “for every order on our books, there’s a customer urgently waiting for it”—helped grow North American revenues by 40% to about $23.5 billion and earnings before interest and taxes 65% to roughly $2.5 billion.

Key to sustaining that momentum will be continued improvement in Daimler’s supply chains. Goetz—who late last fall said the global supply chain was still “somehow broken”—said things have steadily progressed and that major production stops are off the table. But he added that bottlenecks remain with suppliers that saw their own pipelines disrupted by the COVID-19 pandemic and are still working to restore those. The Daimler team, he said, does not expect all issues to be resolved by the end of this year.

One tailwind for Daimler in North America is the new Western Star 57X line, which was launched last year and which specifically targets owner-operators and small fleets. Chairman Martin Daum said the vehicles have been a “phenomenal market success” and have seen “especially strong” order volumes of late.

“That truck is really rocking its segment,” Daum said.

As a group, Daimler Truck Holding sold more than 520,000 units in 2022, up 14% from the year before, for about $54.3 billion in revenues. Net profits climbed 16% to nearly $3 billion, while adjusted EBIT jumped 55% to more than $4.2 billion. Daum called the year’s numbers “a really strong performance” and added that Daimler Truck is moving in the right direction when it comes to its goals of growing services revenues and lowering operating costs by relocating some production to the Czech Republic.

Zero-emission sales tick up, but infrastructure still a hurdle

On the zero-emission front, Daum noted Daimler Truck booked 914 sales in 2022, up from 712 the year before, while booking nearly 2,100 orders. Holding back activity for now, he added, are the higher cost of zero-emissions trucks and the relative lack of infrastructure. The company is pushing ahead with pilot projects and infrastructure construction to prove the longer-term business case, Daum said.

Shares of Daimler Truck (Ticker: DTG) fell more than 4% to about $31 March 10. Over the past six months, however they are still up about 17%, a move that has grown the company’s market capitalization to more than $25 billion.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications FleetOwner, Healthcare Innovation, IndustryWeek, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.