Daimler Truck headquarters in Berlin. (Bernd Weißbrod/dpa/TNS)
Daimler Truck Holding AG said it plans to double the size of its defense business by 2030 as it seeks to profit from higher military spending globally.
The world’s biggest manufacturer of commercial vehicles is looking to expand the high-margin product area while undertaking cost cuts elsewhere as it seeks higher returns. As part of that effort, Daimler Truck plans to eliminate around 5,000 jobs in Germany, the company said July 8.
“We will grow in areas with major potential, such as zero-emission trucking in Europe, the defense sector, as well as our parts and services business,” said Achim Puchert, a member of the management board responsible for Mercedes-Benz Trucks.
Daimler Truck’s strategic tilt toward defense is the latest sign of major European industrial firms seeking to profit from rising outlays on armed forces. NATO countries last month agreed to spend 5% of GDP on defense, up from a previous target of 2%, raising the potential demand for Daimler Truck products like military logistic trucks and the extreme off-road Unimog vehicle.
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The announcement comes alongside its capital markets day where it set out its growth plans for 2030.
Daimler Truck said it was aiming for an adjusted return on sales for its industrial business of more than 12% by 2030, above the 9.6% level it hit during the first three months of 2025. It’s also targeting a return on capital employed of as much as 50%, compared with 39.7% in the first quarter.
Shares in Daimler Truck fell as much as 4.3% after the new targets were announced, but have since erased the initial decline to trade 0.9% higher at 2:55 p.m. in Frankfurt.
Capital Market Day 2025 | Daimler Truck Holding AG 🚛🚍️
We are proud to host our Capital Market Day 2025 at the Truck Manufacturing Plant in Cleveland, North Carolina, under the theme “Stronger 2030”.
➡️Find all information here: https://t.co/hayjN8wqui pic.twitter.com/s99g8vqJOV
— Daimler Truck (@DaimlerTruck) July 8, 2025
The decline was expected, analysts at Bernstein wrote in a note, citing the stock’s recent strong performance and the fact that investors had already priced in upgraded targets.
New Buyback Plans
The industrial giant said late July 7 it would buy back 2 billion euros ($2.34 billion) of its own shares, extending a policy of returning cash to shareholders even as the transition to low-emission vehicles adds to costs.
The repurchase program will start during the second half of 2025 and is set to run for as long as two years, the company said. The buyback is a “good use of cash” and confirms Daimler Truck’s attractive valuation, RBC analyst Nick Housden said in a note.
The German company is trying to bolster its competitiveness as the industry contends with muted demand and a costly transition to zero-emission technologies. The manufacturer said it’s aiming to cut jobs in Germany by shifting production abroad and not hiring new staff to replace retiring workers.
In May, Daimler Truck joined rivals Volvo AB and Traton SE in dialing back expectations after President Donald Trump’s trade moves, lowering its sales and profit guidance for the year. Sales of its Trucks North America segment slumped 20% year-on-year in the three months through June.
