Daimler Truck to cut costs in Europe by $1.1 billion after earnings slump

(Reuters) - Daimler Truck, one of the world's largest truckmakers, launched a billion-dollar cost-cutting programme in Europe on Friday after a poor performance in the region weighed on earnings.

The efficiency programme will result in a reduction of recurring costs for Mercedes-Benz Trucks in Europe of over 1 billion euros ($1.08 billion) by 2030 at the latest, the company said.

Its stock was up 3% at 0804 GMT.

"While 2024 was a solid year with strong cash generation on a Group level, performance and resilience are not satisfying in Europe," CFO Eva Scherer said in a statement.

For 2024, Daimler Truck reported a 15% drop in adjusted earnings before interest and taxes (EBIT) to 4.67 billion euros ($5.06 billion), citing lower demand and cost challenges in the European market.

The effects in Europe were only partly offset by recovering markets in Latin America, the company said.

For 2025, the company forecast adjusted operating profit would rise by 5%-15%.

JP Morgan called the guidance "solid", adding the mid-point was 4% above consensus estimates.

The outlook depends on the macroeconomic and geopolitical environment, particularly possible impact from tariffs, the company said.

European truckmakers faced challenges last year as sales declined following a record-breaking performance in 2023, fuelled by pent-up demand from the pandemic.

German rival Traton was cautious about sales for the commercial vehicle market in 2025, while Swedish Volvo reported strong quarterly order intake.

Shares in European truck makers have been volatile so far this year, rallying on hopes of higher orders ahead of U.S. President Trump's tariffs and production shifts to the U.S., but then hit by the cautious outlook for European sales and U.S. efforts to reverse electric vehicle related rules.

($1 = 0.9219 euros)

(Reporting by Andrey Sychev and Amir Orusov, additional reporting by Anastasiia Kozlova; Editing by Sherry Jacob-Phillips, Rashmi Aich and Elaine Hardcastle)