Commercial Vehicle Industry Analysis: Mixed Recovery Ahead

Commercial Vehicle Industry Performance in 2024

Regional Struggles and Cautious Investment

The commercial vehicle industry (trucks and buses above six tons in gross vehicle weight) saw some pockets of growth globally in 2024, but other markets faced challenges. While global sales of heavy commercial vehicles began to decline towards the end of 2023, the most significant drop occurred in Q3 2024, with Europe and Japan/Korea experiencing the largest losses.

Economic Challenges and Rising Costs

Overall, this decline in sales was due to stagnant global economies that resulted in a lower demand for transportation. Additionally, companies have been struggling with extra costs associated with decarbonization goals and regulations as well as global supply chain disruptions.

A Cautious Approach in Key Markets

Due to these global challenges, transport companies in 2024 exercised caution and postponed their investments, particularly in Europe and North America where freight rates were declining.

Similarly, in mainland China, demand for commercial trucks in 2024 was well below previous peaks. This decline was due to the country’s economic challenges and a pre-buy effect that led to higher-than-normal sales in advance of the China VI emission norms regulations.

Regional Trends in Asia and South America

Meanwhile, in India and Indonesia companies adopted a wait-and-see approach and delayed purchases until after the presidential election results were announced.

In South America, the main growth came from Brazil, where the market grew substantially last year owing to pre-Euro VI regulation demand as well as a rebound in agriculture. 

Commercial Vehicle Industry Analysis for 2025

Slower Growth and Economic Conditions

In our Q1 2025 forecast round, we have cut the outlook for global truck sales by 4% in both 2025 and 2026. However, we anticipate a slight market uptick this year compared to 2024.

Expected cuts in interest rates, slowing inflation and an increase in freight rates will help fleet operators to invest in new vehicles in 2025. Truck fleets have aged over the last few years, due to low replacement rates during the Covid-19 pandemic and the semiconductor crisis. Therefore, we expect growing replacement demand to drive 2025 commercial vehicle sales, particularly with tighter regulations and zero-emission targets on the horizon.

Uneven Recovery Across Regions

However, this growth will be uneven across regions. The recovery in Central and Western Europe faces headwinds from sluggish economic growth, declining order intake, and political instability, which creates significant uncertainty for businesses.

In Eastern Europe, a modest growth outlook is anticipated due to declining inflation; however, the Russian heavy truck market is expected to stagnate as the war in Ukraine, weakening currency, and Western sanctions finally take their toll on the local economy.

North America: Good Chances for a Rebound but Risks Remain

In North America, new-registrations volume is on track for a year of modest growth, after a small decline in 2024, which was marked by difficult conditions particularly in for-hire truck transportation. 

This year’s forecast upturn rests on broad economic fundamentals, especially in the United States, as well as on the expected start of a pre-buy ahead of 2027 US regulatory changes that may raise vehicle prices.

Risks and headwinds remain abundant, among them the predicted decline in the Mexican truck market; uncertainty around the timing of the rebound in US trucking; and prospects for increased US tariffs on goods imports from Mexico, which may dampen economic activity across the region and, by extension, demand for new trucks.

Mainland China: Modest Growth Amid Challenges

In mainland China, despite ongoing weaknesses in the property market and low consumer confidence, truck sales are poised to gain from replacement needs, infrastructure investments, and a newly introduced scrappage subsidy. However, growth is expected to be modest.

Other Asian Markets: Infrastructure and e-Commerce Boosting Sales

Meanwhile, in other Asian countries a booming construction industry, ongoing infrastructure projects, a rise in e-commerce, and an expanding road network will boost heavy truck sales. Fleets in the region operate with outdated trucks, so replacement demand will play an important part in driving sales growth going forward.

South America: Modest Projections Amid Economic Challenges

Demand in South America is projected to be modest this year, as Brazil absorbs last year’s elevated sales, while other countries are faced with high inflation, challenging credit conditions, and political instability.