MUNICH / LONDON (IT BOLTWISE) – Volkswagen’s commercial vehicle subsidiary, TRATON, has adjusted its annual targets due to the current market situation. Despite a challenging environment, results for the first nine months exceeded analysts’ expectations. The stock responded positively to the news, although challenges remain in North America.
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Volkswagen’s commercial vehicle subsidiary, TRATON, has adjusted its annual targets in view of the current challenges in the industry. Despite a difficult market environment, the results for the first nine months were better than experts expected. Particularly notable is the increase in vehicle orders, which exceeded expectations. The TRATON share listed in the MDax then rose by 2.8 percent to 27.66 euros, which shows that investors responded positively to the adjustments.
The challenges that TRATON faces are diverse. In North America, incoming truck orders continued to collapse in the third quarter, which can be attributed to the customs disputes initiated by US President Donald Trump. These have put a considerable strain on the mood in the industry. However, analysts such as Akshat Kacker of JPMorgan and Michael Aspinall of Jefferies emphasize that TRATON’s outlook is better than feared, pointing to a robust performance in the third quarter.
Company boss Christian Levin has adjusted the forecasts for the operating margin and net cash flow in the vehicle business. TRATON is now aiming for an adjusted operating margin of 6.0 to 7.0 percent and expects a net cash flow of 1.0 to 1.5 billion euros. These adjustments reflect the challenges the company faces, including worsening utilization, currency effects and higher tariffs. TRATON is also currently investing heavily in a new Scania factory in China.
TRATON’s sales fell by 8 percent to 32.3 billion euros in the first nine months, while adjusted operating profit fell by over a third to 2.04 billion euros. Despite these declines, the 7 percent increase in new orders to 202,111 vehicles shows that the company still has growth potential in some markets, particularly in Europe. However, US carriers’ reluctance to place new truck orders due to unclear prospects for shipments from US ports remains a problem.
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