2025 commercial vehicle industry to see sharp decline in Europe

Commercial Vehicle Industry Performance Highlights

Western Europe’s economic downturn has been characterized by consecutive quarters of below-trend economic growth and outright contraction in one of the region’s largest economies, Germany, for two years in a row.

International transport, in particular, has suffered. The downturn has hit the dominant Artic (tractor truck) partition of the Class 8 heavy-truck market hard, including challenges such as rising operating costs and a shortage of drivers. The region’s new registrations of Artic trucks in 2024 fell for the first time since the pandemic in 2020.

Meanwhile, Rigid trucks (aka. straight trucks) have grown due to local investments from European funds, particularly the RePowerEU program and the EU Recovery and Resilience Facility, which have funded infrastructure and supported the transition to more sustainable local transport across EU member states.

Europe's economic woes show no signs of easing. The latest forecast expects subdued real GDP growth in Western Europe in 2025, and the threat of US tariffs will raise policy uncertainty for firms evaluating existing supply chains and those considering new investments.

The political context also sees France and Germany, two countries driving the European economy, facing a crisis, and EU border conflicts do not seem to find a short-term solution.

According to S&P Global Mobility’s newly published forecast, the Western European commercial vehicle market will register a 4.2% year-on-year decline in 2025, to some 290,000 vehicles, after having contracted to an estimated 303,000 units last year. 

A Complex Regulatory Landscape Has Transformed the Usual Market Conditions

For deeper automotive insights, analyzing evolving safety regulations and environmental policies is crucial to understanding the shifting dynamics of Western Europe’s commercial vehicle market.

The regulatory landscape compounds the difficulties of the current situation for the commercial vehicle industry. The entire European automotive industry is heavily influenced by the economic and social policies implemented by the EU, as well as the mandatory introduction of new technology aimed at improving emissions and vehicle safety.

Alongside environmental policies, the heavy transport sector in Europe has recently adapted to various safety regulations, such as the General Safety Regulation II and the update of the second-generation digital tachograph. These changes led to clear pre-purchase behaviours in several Western European countries during 2024, and the sales trend has been visibly depressed since then. 

How New Regulations Will Impact the Commercial Vehicle Industry

Regulations designed to reduce emissions that will have the biggest impact, especially toward decade’s end and beyond. In 2024, the Eurovignette Directive took effect in EU countries and incorporated CO2 emission classes into highway toll calculations, tipping the scales somewhat in favor of vehicle replacement.

Local initiatives like Critic’Air in France also aim to incentivize the replacement of the vehicle fleet with less polluting alternatives by acting on the Total Cost of Ownership of older models, or limiting their circulation permits.

Further ahead, the MHCV sector will have to face the transition to Euro 7 regulations, which are expected by mid-2028 for new models and mid-2029 for all new registrations. Following that, the three thresholds outlined in the FitFor55 program for 2030, 2035, and 2040 will push the market to modify the sales mix between traditional internal combustion models and low or zero-emission models aiming for a gradual reduction of their environmental impact, or risk hefty fines.

Around each of these milestones, we anticipate new peaks in pre-registrations that will disrupt seasonality, impact sales planning, and affect product availability in the market.