The business turnaround dealer and aftermarket responders experienced in the final months of last year continued in the first quarter of 2025, but optimism for the remainder of the year is rapidly evaporating in the midst of tariff uncertainty, reported responders to the Trucks, Parts, Service quarterly MarketPulse survey in April.
In just three months, market sentiment has moved from nearly all dealer and aftermarket responders expecting equal to or better year-over-year business conditions for the months ahead to overwhelming concern that business is destined to further contract.
The end of the freight recession as winter concluded was supposed to signal the start of trucking’s next economic boom period. Instead, dealers and aftermarket operators are once again retreating to their foxholes, tightening investment strategies and preparing for another stretch of unremarkable sales.
[RELATED: Trade war could extend freight recession]
The first quarter, fortunately, was a slight reprieve.
Business conditions improved nominally for dealers and substantially for aftermarket operations in Q1, with both channels improving over Q4 and the aftermarket also outpacing its Q1 projections made in January.
Rating of business conditions among TPS MarketPulse survey dealer responders through first quarter.
Overall, dealers pegged the quarter as a 5.44, on average, on our 1-10 scale (where one is the worst quarter ever and 10 is the best) while aftermarket responders averaged a 6.04.
Dealers have now rated business conditions between a 5.19 and 5.46 on our scale for the last five quarters. Aftermarket ratings have shown more variance; the 6.04 average is the best since the first quarter of 2024, and is more than a point higher than the 4.95 rating the channel gave Q3 last year.
Both channels fear the upswing could be short lived.
Looking at Q2, dealers anticipate business conditions to slip to a 5.22 this quarter with the aftermarket falling to 5.91. Even more illuminating are six-month predictions. In our January survey, 77% of dealers and 87% of aftermarket responders expected the first half of this year to be equal to or outpace 2024.
In the dealer channel, only 28% of responders still feel that way about Q2 and Q3 with and most (61%) expecting business conditions to be down 1-5% year over year. Aftermarket responders remain somewhat more hopeful — possibly due to a stronger Q1 — with 43% expecting business to be flat and 34% expecting year-over-year growth. The latter is still down precipitously from 64% just three months ago.
Rating of business conditions among TPS MarketPulse survey aftermarket responders through first quarter.
Dealers voice their concerns directly toward Washington.
“[There’s] lots of uncertainty around tariffs,” wrote one responder. “Definitely not helping anyone who sells capital goods.”
“The uncertainty related to tariffs and regulatory implementation are the biggest drivers of concern at this point,” added another.
One positive dealers can finally point to again is used truck sales. The used truck market was the weakest segment of dealer operations throughout 2023 and into 2024. Nearly 38% of dealers pegged it as their weakest business unit in Q1 last year; this year that number was 0%.
“Used is heating up. Finding good used equipment is a major goal,” one dealer said.
But an improving used sector won’t overcome losses in the new truck space — where 28% of dealers experienced the most year-over-year losses in Q1 — which is likely why dealers are tempering expansion plans.
[RELATED: Parts operations taking ‘wait and see’ approach to tariffs]
Three quarters of dealer responders after Q3 last year were considering expansion plans. That number plunged to 41% after Q4 and was 44% in April’s survey. Aftermarket expansion plans are equally uncertain. Only 16% of responders intended to expand after Q3 last year. That number leapt to 45% after Q4 but fell back to 30% after Q1.
The economy is the clear driver of business uncertainty.
All TPS survey responders in April rated current economic and business conditions as a top four concern and among that group, most (61% for dealers, 82% for aftermarket) stated it’s their biggest concern.
TPS will conduct its 2025 second quarter MarketPulse survey in July and publish a brief synopsis of the data after it concludes.
Want to read more insights from our first quarter survey? Or participate in future surveys? We’d love to hear from you.
All truck and trailer dealers and independent aftermarket businesses are encouraged to participate in the TPS MarketPulse survey, and only businesses who choose to participate will receive complete survey results each quarter. For more information, and to register, please email [email protected].
