Edition 19 – Warning signal: What the USA’s truck slowdown means

Heavy trucks hit the brakes

As a point of departure, heavy-truck purchases often act as a bellwether of industrial health because fleets only invest in new rigs when they expect freight volumes to rise.

In mid‑2025, however, US commercial truck sales were down nearly 6% year‑on‑year; Class 8 orders (the largest and heaviest truck category) fell 36% and medium‑duty orders plunged 42%. July’s heavy‑truck sales were about 12% below the year‑earlier level, and net orders in August were among the lowest in a decade.

Typically, these types of contractions precede broader slowdowns because they reflect fleet managers’ expectations of reduced freight demand.

But the latest downturn isn’t limited to trucks. Aside from one factory launching a new product, every plant I visited reported declining volumes for traditional component assembly programmes like exhaust systems, HVAC components, and engines. When asked, managers cited softer orders and cautious customers rather than previous disruptors like supply‑chain issues or the transition to electric vehicles.

Soft demand for passenger vehicles

On the passenger vehicle side (as reported in our previous article), consumer conditions remain challenging. A Plante Moran outlook notes that 72% of Americans think it’s a bad time to buy a new vehicle and that average transaction prices hover around $47.5k, with monthly payments averaging $913. RefiJet’s update shows new‑car loan rates near 6.8 %, while used‑car loans average 11.54 %, leaving many would‑be buyers sidelined.

Forecasts for the broader US auto market paint a picture of fragile demand. Alliance for Automotive Innovation’s August 2025 Reading the Meter report expects light‑vehicle sales to hold at about 15.3 to 15.9 million units through 2025, but warns that production cuts may be needed if inventory builds. Earlier, its June update revised 2026 and 2027 sales forecasts slightly upward to 14.54 million and 15.68 million units, respectively.

Trading Economics’ econometric models are less optimistic, projecting around 15 million vehicles in 2026 and continuing a downward trend towards 14.6 million in 2027. Boston Consulting Group’s (BCG) tariff‑scenario analysis suggests that 2025 sales could slide to 14 million in 2026 before recovering in 2027.

What will the next two years bring?

One thing that struck me in my conversations with automakers was the obvious mood shift from cautious optimism about the return of ‘Made in America’ to an attitude of cautious pessimism.

The weight of the industry forecasts above also points to a prolonged period of caution, but three key themes emerge:

1. 2026 could mark the trough: In the absence of any major policy shocks, analysts expect US light‑vehicle sales to drift around 14.5 to 15 million units, which is down from 15.5 million in 2024 but not collapsing. Commercial-truck orders are likely to remain subdued as fleets focus on replacing aged assets rather than expanding.
2. 2027 may bring modest recovery: Several forecasts see sales rebounding toward 15.5 million or even 15.7 million units, contingent on easing tariffs and improved consumer confidence. If tariffs do decrease, BCG suggests the 2026 drop could be less severe and the 2027 recovery stronger.
3. Policy and pricing will shape outcomes: Future sales hinge on tariffs, interest rates and input costs. The Alliance’s report cautions that high inventories could force production cuts in early 2026, while BCG’s tariff analysis underscores how high tariffs on vehicle and critical part imports would dramatically depress demand.

4 steps for struggling plants

Given the uncertainty, plant managers need to prioritise practical actions over theoretical transformations. Here are four steps that could make a tangible difference during a downturn:

1. Conserve cash and manage inventory: Use flexible staffing and adjust production schedules weekly or even daily based on order intake. Maintain open dialogue with suppliers to avoid stockpiling parts.
2. Focus on core programmes: When volumes shrink, concentrate resources on profitable contracts and delay investments in speculative programmes until you get a clearer view of the way forward.
3. Make incremental efficiency gains: Rather than large‑scale overhauls, target obvious sources of waste. Ensure changeover procedures are quickly and consistently followed, reduce rework by improving first‑pass yield with digital operator guidance, and perform preventive maintenance during off‑peak hours. Research indicates that even minor reductions in downtime can save significant costs in automotive plants.
4. Monitor credit conditions: Stay attuned to interest‑rate trends; a sustained decline in borrowing costs could open a window for necessary equipment replacements without overextending finances.

The road ahead

While most forecasts suggest that US vehicle sales won’t collapse in 2026, they also point to a modest recovery at best by 2027. High interest rates, elevated prices and policy uncertainty will continue to weigh on demand. So where does this leave manufacturers?

While we can’t control the demand, we can control efficiencies and do more with less, for less.

In this environment, being pragmatic and maintaining operational discipline will be more valuable than ambitious but speculative transformation projects. Managing cash flow, aligning production with real demand, and extracting small efficiency gains wherever possible should take priority. Plants that navigate the next two years with caution and agility will be best positioned to capitalise when the market eventually rebounds.

For more on this, watch this one-minute explainer video here.

To learn more about how we’ve helped customers improve efficiencies in their plants, read these real case studies here.