At this time, a prompt to activate your microphone will appear on your screen. It is worth mentioning that some of the questions will be answered in English, and once again, we ask everyone to use the translation tool if necessary. Before proceeding, we would like to clarify that any statements that may be made during this video conference regarding the company's business prospects, projections, and operational and financial goals constitute beliefs and assumptions of Iochpe-Maxion 's Board of Directors, as well as information currently available to the company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur. I would like to turn the floor to Mr. Pieter Klinkers. Sir, you may now proceed.
Hello, everybody. Good morning to most of you and good afternoon, I believe, to some of you. Welcome to our second quarter conference call. If you can go to the next slide, what are you? Okay, let's have a look at the market first. On the left side of this slide, you see pass car. I would say that's not a very exciting picture. If you look, including China, excluding China, it's basically a stable market in the years 2024, 2025, and 2026. Now, there's more movement if you look in certain regions, of course, but overall, we would say this is a pretty flat market, at least in the beginning of this cycle of five years. On the right side, you see a little bit of a different picture. That's the truck market as we see it, as IHS sees it.
Basically, we see a reduction in this year, 2025, compared to 2024. Of course, that's largely focused on what's happening in North America, but also to a lesser extent what's happening in Europe. On the other hand, when we talk about truck, you know, when we see the CAGR over the years, that is a lot more exciting. We look forward to achieving, reaching these numbers. Pretty flat on the light vehicle side. On the short term, even on the long term, less growth, but on the truck, a different picture on the short term with some declines, especially North America, Europe, and then a more favorable picture on the midterm and the long term. If you go to the next slide, you see on the left side of this slide, you see an executive summary, I would call it.
Our net revenue, as you may have read it, is up about 6.8% versus the same period last year, the second quarter of 2024, and it amounted to approximately BRL 4.1 billion. Our gross profits are also up versus last year. That's an increase of 12.2% over last year, which means a gross margin in the second quarter of 2025 of approximately 13%, which is an increase also of 0.6 percentage points over last year. A good number, we believe. Same for EBITDA. We were able to achieve a margin of 11.0%, which is a growth of about 15%-16% compared to the same quarter last year, and an increase of 0.9 percentage points versus the second quarter of last year. Net income was up meaningfully. We had some negative effects there last year, non-meritory last year.
Also, these effects were there this year, but to a lesser extent, but we believe a much better number this year from a net income point of view in the second quarter than what we were able to show last year. Our leverage is at 2.38x in the second quarter of 2025, and that compares to just under 3 in the second quarter of 2024. Now, when you see the left side here, I think it doesn't look so bad. If you look at the right side, I think it looks pretty good. That's a very nice wheel. I hope to be able to talk about that a little bit more when we see, hopefully, several of you during our investor day that we are planning to organize. You can go to the next slide, what are you?
Let's have a look at our operating revenue, how it compares to last year. I said 6.8%+ versus 2024. We're also up in the first half of 2025. That's a plus of about 8% that we were able to realize versus last year. This is, of course, in that market that is both down in pass car, as well as in truck, if you exclude China, which is what we do because China is so big in general and we are so small in China still. We believe even if you exclude FX, this is a number that is better than what the market is showing at this moment. Go ahead, what are you?
If we look a little bit more in detail on where that revenue is coming from and how it compares to what we were looking at one year ago, you clearly see that from a structural components point of view, the percentage of revenue of our total revenue, it's down. That has all to do with the North American truck market that we will come back to a little bit more in detail when we talk about our operating revenue in North America. Components, just because of that reason, are down on the total. It's being made up by wheels, particularly by aluminum wheels, particularly there in Brazil and in Europe. Overall, a good number, I would say, that is being supported more this time by wheels than by components.
That's a little bit what we see back also when we look at the complete first half of 2025 when we compare it to the first half of 2024. As a matter of fact, we believe this kind of picture will continue to be there for the remainder of the year. That's our strive, at least, to make up in certain parts of the world what we may be losing because of market tendencies in other parts of the world. If we look at the revenue by customers, of course, that's logical. You're going to see the same thing. If you look, for instance, on the left of this slide, you see Daimler. That revenue, of course, is down versus last year because we sell a lot of product to Daimler trucks in North America. When that market is meaningfully down, it's hard to have the same revenue.
It's being made up. You see here at customers like Toyota, at customers like Renault, Nissan, at customers like Hyundai, Kia. That's mainly LV, that's mainly aluminum wheels. Overall, a good picture where we are mitigating, offsetting, modern offsetting in LV around the world, what we lose in primarily truck in North America. You therefore also see that top 10 number or top five number percentage, it's going down a little bit compared to what we showed last year. Instead of 77%, top one making up of our total turnover, now it's only 73%. We're making up elsewhere what we lose in, for instance, in Daimler in North America. Looking more at the regions, here you see South America. South America, as you know very well, is a good market to be in right now, especially when you talk about the first half.
I would say Maxion is outperforming a relatively strong year-to-date market. We do that especially in light vehicle wheels, both steel and aluminum, and in CV components. Our operating revenue is up about 23%, 24% in light vehicles, which is really outpacing the market. You see the market on the bottom right up about 8%. In commercial vehicles, the market is about flat and we're up 3%, 4% in Maxion. That's, I would say, a clear evidence of us outpacing the market from a revenue point of view. That has to do with units. We're selling more units than last year, clearly. It also has to do with an appropriate passing on of metal and other inflationary costs into the market. If we look at North America, here the numbers are down.
As we said already, and I believe everybody knows, the market, the truck market in North America is meaningfully down versus last year, but also versus prior projections. When you look at our numbers, the market being down about 28%, 29%, 30% right now, our numbers are down as well, 25.7% down in commercial vehicles. In light vehicles, we are more or less stable, so a little bit better than the market, but that's not good enough to make up what is being lost on the truck side. This is a difficult market for everybody right now. If we're trying to mitigate it locally, we are able to mitigate it globally, but locally, this is a very difficult market at this moment.
We also believe on the very short term, this market will not come back, but we do believe, and that's the positive thing, all the demands, all the production or sales that we're missing right now, that demand does not go away. That demand is there, and ultimately, it will be replaced. When exactly is that ultimate moment? We believe next year the market will be better than what we're seeing right now, and we believe in the future, you know, the cycle will be up again. Whatever we lose now, we believe it will come back to us, just not right now. When you look at Europe, that's another market. It's not as drastic in North America truck, of course, but it's a market that's slightly contracting. You read that everywhere. You see it everywhere. Light vehicles, a few percent down. Commercial vehicles, about 1% down.
We see that as well, but we are able to more than offset that. Our operating revenues are up more than 20% on light vehicles and more than 25% on commercial vehicles. There is FX in there, of course, but even if you subtract the FX, the foreign exchange impact, then our revenue would still be up. Also, our units are up, both on the LV side and the CV wheel side. We only have wheels, no components in that region in Europe. It's again a combination of the units being up and the recovery of increased metal and other inflationary costs. The combination of that leads us to outperform this market that is, I would call it sluggish, but we are able to do a good job within that market.
If you look at Asia, our revenue is up both on light vehicles, commercial vehicles, as we would expect it. I would say Maxion is growing with the market. There are some different tendencies going on within Asia. I would say Thailand, of course, a very small market, but a relatively small market. Coming back to a certain extent, we see that in our numbers. India, on the short term, a little bit less growth than what we were expecting, but we're doing a good job also in India, both LV and CV. We believe that going forward, this is definitely the growth market that everybody is expecting it to be, and we will be performing well in that market.
If we have a closer look on what that all means, what we do in these regions from a gross profit and gross margin point of view, you can see that both absolute and in percentage, you know, our gross profit is up. We were able to achieve a 13% gross profit in the second quarter of 2025, which is about a 12% increase versus the same period last year, BRL 535 million versus BRL 477 million. That's in line with the whole first half of the year 2025, where we are now looking at about a 12%, 12.2% gross margin that we achieved in the company. If we look at EBITDA, it's a similar picture. We were able to achieve the 11%, as we said before, which is a 16% increase over last year.
When you look at it from the first half versus last year, also here a reasonable increase, and the first half now turned out to be double-digit for the company. That means a 0.9% increase in margin in the second quarter and a 0.5% increase in the first half of 2025 compared to last year. Net income, as I said before, last year we had some more meaningful impacts due to FX reasons. We still see those impacts, but it's less in the second quarter of this year as it was in the second quarter of last year. Our net income was very reasonable, we believe, at BRL 87 million, which is a big improvement versus what we were able to show last year.
With that number, also the first half of the year now looks more reasonable than what we were able to show in the first quarter of this year. From an investment point of view, I mean, we've been talking a few times already about disciplined CapEx management, and I believe also in the second quarter we were able to stick with that rhythm. If you would exclude it for FX, we would actually be a little bit below in the second quarter and in the first half of 2025 versus what we were doing last year. Overall, I would say, you know, we stick with the premise of having a disciplined CapEx management in place. You look at our leverage, you see the leverage has been coming down over time, and of course, we all know about the seasonality of numbers.
We believe that 2.38 needs to be compared with the second quarter of last year, where we were at 2.97, and it's definitely our strive to continue that trend down versus prior quarters, versus prior year, half this year, and versus the complete year of last year. We would say we are on track with what we were focusing on and targeting to have as a leverage in the second quarter of 2025 or the first half of 2025. Our gross debt, not a lot of new news here. We believe that the composition of our gross debt is still very much in line with where we do business. Of course, the majority is in BRL, a little bit more than the revenue that we generate in Brazil, but very much in line.
The second biggest part is in Europe, 34%, which is very much in line with our revenue, and the remaining part is mostly in dollars. If you look at the terms, actually, we were able to reduce the percentage of short-term debt significantly versus what we were looking at last year, which was not too bad in the first place, I believe. Right now, we're looking at only 6%, 7% of our debt being short-term, meaning less than one year maturity. You see that on the top right as well. Our only big maturity, as many of you know, will be in 2028, and we believe we have ample time to have the right strategy in place, the right timing in place to manage that bar that you see there in 2028.
From a cost point of view, if we compare the second quarter of 2025 with the second quarter of 2024, you can see here that in all our major currencies, in reais, in euros, dollars, we've been able to decrease the cost of our debt, which is another good achievement, I believe, year- over- year. Last but not least, a couple of slides on new programs. You see on the top a nice vehicle. Our message here is that we see Maxion securing a growing number of business wins with premium brands. Those are not only, but especially in Europe, and that's a good thing for the company. Not only is it the right thing from a revenue and from a margin point of view, but it also proves that our technology is well accepted even by the customers with the highest specs.
In India, we are growing both from a steel wheel point of view, but also from an aluminum wheel point of view. Our global wheel expertise, we are the only global wheel manufacturer being present in India, gives us some advantage. As I said before, when we talked about the regions, we believe in the future of India, and we are doing a good job with new business wins, both in steel wheels and also in aluminum wheels in that market, more to come. In Brazil, the Brazilian market is strong. We see that back in aluminum wheels. We see it also back in steel wheels, especially with new incentives being put in place. In Brazil, maybe that has even more effect for lower segments and therefore for steel wheels, also for aluminum wheels, but maybe especially for steel wheels.
We are very proud that we are able to address that whole market. You've seen it in our numbers. We are outperforming a market that is already relatively strong. We also see that back in the new business wins that we are having in this market that is very important for us. Last but not least, also in China, we continue to win new business there with aluminum wheels. We don't have Pasco steel wheels, but we're continuing to win new business. We believe we do have some unique wheel expertise in place that the customers value. We see some momentum there in gaining new business as well, especially with new energy vehicles, which are the electrified vehicles. Next slide shows you some recognition.
I don't want to dwell on it, but it's important to show the slide because I believe that our customers see us as a very reliable partner. They see us as a stable partner. We see that back in some of the recognitions, not only the new business wins that we get from customers, but also in the recognition that we keep getting from our, keep receiving from our customers. If we go to the last slide as a summary, I hope you can agree with me that, from a value creation point of view, despite the global volatility that we all know that is there and tariffs and changing volumes, we believe that Maxion has been able to maintain robust financial results in the second quarter. We are, we believe, a resilient company.
We'll talk a little bit more about it during our investor day at the end of the month. We are able to continue to have very appropriate productivity. We are agile operations when volumes go up and down or we need to move volumes between one region and another region. We are used to do that. That helps us a lot now in being a resilient company in these volatile times. We have a disciplined cost and pricing management in place. Growth, I believe, overall, we are able to show that we're growing a little bit above the market. We are doing that. From a customer point of view, as I just said, you know, we believe our customers generally see us as a very reliable, stable, and high-performing partner. We are able to show that to more and more customers in our global customer base.
With that, I would say, Rodrigo, I'll turn it back to you and we switch to questions and hopefully also answers.
Thank you, Pieter. We'll now start our questions- and- answer session. I'd like to ask you to all ask your questions at one time and wait for our answers. We would kindly ask you to send your questions through the Q&A session. Per standard, we are going to say your name and ask you to open your microphone. The first question comes from Fernanda Hecker from BTG. Fernanda, you can proceed.
Good morning, everyone. We have two questions on our side. First, I'd like to ask you from a perspective. Pieter has shown an updated performance globally. When you look at commercial vehicles, the number he showed is less than 5%. When you look at the perspective for the first semester for 2025, we should see a decrease of volume of 3% in commercial vehicles.
I would like to understand if considering this scenario, we should expect the second semester better for commercial vehicles. If you could talk a little bit about the granularity of the different regions and tell us if you see any possible improvement in North America for the second semester for commercial vehicles. The second question regards profitability. We see you going back to a two-digit level. We would like to understand for the second semester if you could see we could expect profitability to remain in two digits, especially considering that Q4 has a seasonality that is not so good. This would be my two questions.
Yes, thank you very much, Fernanda. These are very relevant questions. Let me answer the first question first. The North American market, as I said, it's a weaker market than people were expecting, let's say, six months ago. Right now, I would say it's a weaker market even than what people were expecting. People, I'm especially speaking about our customers, were expecting just recently. Unfortunately, I do not believe, we do not believe that this market will turn around suddenly. We do believe that the market will be up, but it is very difficult right now to predict when that market will be up. Will it already happen in the second half of this year or will that only happen somewhere in the course of next year? Of course, we all hope rather sooner than later.
Given today's volatility in geopolitics, etc., it's very hard to predict exactly when that market will turn around. We all do believe the market will turn around. Of course, if the market does not turn around, you know, we will continue our strive. As we've done it in the second quarter, as we've done it in the first half of this year, we will continue our strive to, first of all, offset any impact locally. As you know, we produce product for the North American truck market primarily in Mexico. We've been able to do a good job there. I'm sure we will do another good job in the second half of this year.
Of course, we'll try to make up most of that, if not more of that, more than that in the rest of the world. It is very hard to predict exactly when that market will come back. From a profitability point of view, I think our second quarter was decent. Of course, we want to continue on that trend. As you say, there will be seasonality. I would say we are looking at the second half of the year that should be stronger than the first half of the year in our company. Exactly how strong it will be will depend on how the second half of the year will develop and what other measures will be taken and how trade will develop in the world.
Basically, I feel confident, we feel confident that our second half of the year will still be stronger than the first half of the year. Again, saying now exactly how strong it will be, it depends on, of course, how certain things develop over the next months.
Thank you very much, Pieter.
Fernanda.
Our next question comes from Gabriel Laccini from Santander. Gabriel, you can proceed.
Good morning, everyone. Thank you for the opening. I have two questions. The first is more focused on leverage and cash management. If you could talk a little bit about the progress and how you're going to reach lower levels of EBITDA. Also, we'll talk about the pillars of cash generation for this year. The second question is more focused on CapEx. We are getting to that level of BRL 500 million- BRL 600 million this year, and I would like to understand what you would consider normalized CapEx and see if you could talk a little bit more about that.
Good morning, Gabriel. Thank you for the question.
Talking a little bit more about leverage here, with regards to what we see here, we have a stable maintenance in the periods of the fourth quarter of 2024 when the first two quarters of 2025 were 2.38 times, which is very good compared to where we were last year. Here, we can see the increase in our net debt of about BRL 200 million. When we compare the first half of the year to the second one, we have an increase in working capital. We had a loss of dividends of BRL 100 million, and we didn't have a large volume of payments for our previous year. Now, when we compare the second quarter of 2025 to the second quarter of 2024, we see an increase of net debt of about BRL 230 million.
Considering our balance, we see that we have BRL 230 million, BRL 260 million increased due to the increase of working capital in that period. Additionally, we have an increase of the exchange rates. When we compare Brazilian reais and dollars, we have a decrease. We go from 6.19 at the end of the year to the second quarter of 25.46. Then we have an error that we have a kind of a, we maintain the level. When we analyze the working capital for the last few months, we see that the working capital ratio has increased 1.2% points, reflecting the first semester of preparation for the demands of the second semester. We see a marginal increase of 0.1% points, reaching 12% in the working capital ratio.
What we expect is that during maybe the third quarter, we should go back to our historical working capital levels of about 13% and then have a return of this working capital, observing that at the end of the year, we already do work on the deductions regarding seasonality. Considering all that, we see a balance in the leverage compared to cash generation. Regarding cash generation, we have a gross generation of BRL 4 million. When I look at my cash flow directly, we also see a consumption of cash in this period of about BRL 120 million. What we see moving forward is still a quarter that is still aligned with what we expect and what has been seen in our last quarters. We do believe that we have a good cash generation for the remaining of the year. Gabriel?
Just a second question regarding CapEx, if you could give us a little bit more about that.
Okay. Regarding CapEx, I do believe we had a disbursement of an important disbursement in the second semester regarding an expansion in Mexico, mostly, and the almost completion of our plant in Turkey. I believe we should be halfway through our CapEx for the entire year. At this time, that is what we have. That's the perception we have regarding what has been realized in the last few years.
Okay. Very clear. Thank you very much.
Thank you.
Our next question comes from Gabriel Rezende from Itaú BBA. Gabriel, you can proceed.
Thank you, Rodrigo. Hello, Pieter, Renato. I have a couple of questions here from Itaú.
In the press release for the earnings, you say that regardless of the uncertainty we had in the second semester, you explain part of the growth in revenues due to the growth of volumes. Was that it? Despite everything, the net in terms of volume has been positive. How can we think of this positive volume when we have some markets that are still negative? The second item regarding volumes, we get the impression that Iochpe-Maxion has kind of managed the dynamics of exchange rates due to your geographical presence. I would like to understand that if in North America, considering your supply from Mexico, if you have had, if you have achieved to export more to North America, considering the restrictions for other regions.
Hello, Gabriel. This is Pieter. Let me answer the first question. When we look at volumes and you speak about positive volumes for the second half of the year, I'm positive that our volumes will be positive for the second half of the year. Now, how does that come? Of course, we have this particular situation in North America where we are basically only impacted, only between brackets, in components. In wheels, we are serving different segments in North America. These segments are either not contracting or we are offsetting any small contraction. Besides that, let's not forget that this company is having a large presence in Brazil. This company is having a very good presence in places like India or Thailand that are actually growing. As we said in Europe, there is contraction, but it's slight. We are able to more than offset that.
You talk about, of course, market share growth. When you talk about market share growth in wheels, that's not something that changes from one quarter to the other. You either lose market share over time or you gain market share over time. Once you gain it, I think normally it's going to be there for a little bit longer. Whatever we gained last year or the beginning of this year, it will also support us in the second half of the year. That, for me, is a given. On top of that, I think we have shown that we have the capability to have appropriate capability of price recovery. We believe we will continue to do or capitalize on the work that we already have been doing. That's also not something that changes too much from one quarter to the other quarter.
If you take all these three things into account, our presence in other regions that are growing, our market share gains in certain places, and the recovery of inflation, I think all of that leads me to say that also in the second half of the year, in spite of some of the volatility, we should have a robust situation.
Great. Thank you, Pieter. Thank you, Renato.
Our next question comes from Fernanda Urbano from XP. Fernanda, you can proceed.
Good morning, everyone. Thank you for listening. The first question, in these new operations, you have these relevant capacities for delivery in Mexico and Turkey. I would like you to comment a little bit more about the ramp-up and the expectations for these operations, even facing this scenario of volumes pressed in North America. The second question, especially about Europe, even considering the contraction of the industry, we see a good performance of your revenues, especially if you look at products for light vehicles.
I would like to understand better the drivers behind the performance, and if you could comment regarding market share, prices, and mix of products to understand what you see as the main factor behind this stronger performance that you show compared to the rest of the industry, considering what we can expect for the rest of the year in Europe.
Yeah, thank you very much for these questions. I will take them. First of all, talking about our operations, new operations in Mexico and in Turkey, Turkey for aluminum wheels, Mexico for components. Of course, the market now is a little bit lower, or meaningfully lower than what everybody was expecting in North America. Let's not forget, there are cycles in truck production, and we need to be ready for when the cycle goes up again. That may happen in the second half. It may happen somewhere during 2026, but it will come. Everybody is convinced about that, including us. We better be ready for when that capacity comes because we can't supply our customers. Of course, our customers will not produce less vehicles. They will just choose other suppliers or introduce other suppliers, and that's not what we want. We want to be able to serve our customers.
I believe building that capacity is absolutely the right thing to do, and we will be ready at the right moment. We will be ready at the end of this year and then somewhere next year, and in the next years, the market will turn back in North America, and we are absolutely ready. On top of that, let's not forget, we do not only build that new capacity to be able to supply the market with the adequate volumes, but also from a productivity point of view, we expect large gains from this new operation, and that will also be very helpful no matter where the market is at what point in time. In Turkey, this is an operation that is almost ready to go. As we said recently, we hope to be able to produce, we will produce our first wheels still this year in 2025.
The first year, you will not sell out the complete factory at once, but we believe we will have a quick ramp-up over the next two to three years to be at a very good utilization rate at a short period in time. We feel comfortable. We feel good about those two new projects. If I look at our revenue in LV in Europe, it's a combination of factors. Some of them I have already talked about, but it's clear that we are doing meaningfully better than the market. I believe Maxion is a stable company. I believe Maxion is a very reliable company. I believe Maxion is a high-performance supplier to the customer base. When maybe some other suppliers struggle, our customers value these competencies or that stability even more. Of course, as I said, we gain some market share in a market that is down.
It's very helpful to offset some of the negative impacts that you would have otherwise had, and we don't. That's one piece. Also, the fact that we are introducing new products and we are entering new customer segments. I talked a little bit about the premium segment for aluminum wheels in Europe. We were a relatively small player in that segment, let's say, five to ten years ago, and we've worked our way up to also be able to supply this segment with decent volumes. You don't do that from one day to the other. If you get it done, you don't lose it from one day to the other either. We are now seeing the fruits of that hard work. When you supply that segment with larger wheels and more specs, more value add, you gain more revenue than when you only supply the standard wheels. That's another factor.
I come back to it again. If we pass on inflationary costs, that also helps in the revenue. It's not only the revenue that grows, as I said before, as you may also have seen, it's also the units that go up. It's not only the revenue, but the units are part of the revenue going up. I hope that clarifies a little bit more of that situation.
Very clear. Thank you.
Our next question is from André Mazini from Citibank. Andrea, you can proceed.
Yeah, yeah. More good questions. Thank you very much. When you talk about steel wheels here, of course, you're talking mostly about steel wheels for passenger cars and what's their maybe better use case even for electric vehicles or for new energy vehicles than the use case that you usually have. You're right. We are not always able to talk about all the new business wins that we're gaining, but we are having new business wins with steel wheels more than before on new energy vehicles. It's happening. I'm not saying aluminum wheels will disappear. I think aluminum wheels will continue to be very strong, but we believe that there is a future for steel wheels. We've always believed that, and we've worked hard on supporting that case, but it's happening. It's not just happening because people say, "Okay, now let's take a steel wheel." They're taking different steel wheels.
It's larger steel wheels. It's steel wheels with other features like NVH, noise, vibration, harshness. When you drive an electric vehicle, you don't hear the engine because there's no engine, so you hear the tire, the wheel. We were able to come up with solutions to reduce that noise that you hear, and we're putting them. It's easier to put it into a steel wheel than into an aluminum wheel. Some customers, some very large customers, one very large customer that is very big in electric vehicles, has understood that and is putting very meaningful numbers of steel wheels on vehicles that used to have aluminum wheels. Not everybody's going to do that, but even if some do that, I think it will be a signal to the market that it's also a business case to look at steel wheels that, of course, in the end, are also cheaper.
In the end, those wheels are also even more sustainable than the aluminum wheels. There's a series of advantages of steel wheels versus aluminum wheels that maybe were not so much noted before, and now they're being noted more. As the largest steel wheel producer in the world, we are by far the largest steel wheel producer in the world, and we do have open capacities in the segment. Of course, we are fully prepared to profit from that and to further support that demand from our customers. The second question yet, I hope that answered the first question, but the second question you have is the others. We see growth there, and you were already pointing at the right levers there. There are these new customers that are coming up. You know, there is Chinese entering Europe. There is right now one already nominating suppliers.
I do not want to call the name, but you know, in this case, Maxion Wheels has won 100% of the business. We will not be able to win from every new customer coming into Europe 100% of the business. We will try, but it will be impossible, we believe. We see that happening, and we see that we are able to capture a higher market share in those cases than our traditional market share that we have in those markets. We hope the same will be true in markets like Brazil. That is our strive. On top of that, we are supplying some niches that we were not supplying before, and that is a lot of small customers with sometimes even some different vehicle applications.
Because of our agile operations, we are able to make that work, and also that is helping us to offset some of the reductions that we see at some of the OEM. You are absolutely right. That is an important bar, and that is an important strive that we have made. This is not something we did in the second quarter for the second quarter. This is something we have been doing over the last years that is now helping us to offset some of the negatives and actually outpace what the market is giving us. I hope that clarifies more. This is a very competitive market, the wheel market. We will always strive to have better pricing, but sometimes you get a little bit better. Sometimes a new entrant demands a little bit more competitive prices to have some support into the market.
I think overall our strive will be a continued margin increase, both because of internal reasons, both because of external reasons.
Our next question comes from Andrés Zavarotti from UBS. Andrés, you can proceed.
Thank you, Rodrigo.
Yeah, thank you for the question. I think the market, as we saw in the very first slide that we presented in our deck, is relatively stable from a passenger car point of view and from a truck point of view, actually shows some contraction. If I say our second half of the year should be stronger than the first half of the year, that is mainly because of that trend that we were talking about. Why are we outperforming the market in the first quarter and the second quarter? That trend is continuing. Everything that we gained, new business wins, appropriate pricing, etc., that was happening. It will now be coming to us at a full extent when you look at the remainder of the year.
It's mainly because of internal reasons, I would say, when I make that comment, than because of me suddenly expecting the market itself to be a lot better in the second half versus the first half. Yes, that's one of the uncertainties, right? That's one of the reasons why volumes are different than people were thinking. It's just one of the uncertainties that creates this lower than expected production at a customer base. We believe that many of these uncertainties will be clarified over time. Is that hopefully in the next few weeks or maybe in the next few months? We believe the uncertainties will be clarified and then the demand will be realized and therefore the market will come back. This is one of the things that I think many people are waiting for to have more clarity on. You're welcome.
Our next question comes from Jonathan Colton from JP Morgan. Jonathan, you may proceed.
Good morning, Renato. Good morning, Pieter. Thank you for listening. First, a question from structural components and all that in Brazil. If you could comment a little bit more about that. The second question for Renato regarding the gross margin. Yes, do you see a positive evaluation, better volumes, as Pieter mentioned? How do you think that until the end of the year, you're going to be able to maintain a margin that is better than expected? Any information on that front would be helpful.
Yeah. Hello, Jonathan. Thank you for the question. I think the Argentinian market is looking different than it looked one or two years ago. We believe we have a strong operation in that market. There will be volatility and there will be ups and downs, but right now, our operation is running very well and that gives us some upside. When you talk about the second half of the year or how we foresee margins to develop, as I said before, we believe there's a strong case for us to be continuing on the trend that we have been able to show. How exactly it will evolve in the second half, of course, I'm able to say more about that. We're able to say more about that when we have the next call.
We believe there is a good trend that we're on and that we will be able to continue. We are not immune to anything. We are very good at offsetting, mitigating, and more than offsetting. I hope that's what we have been able to show in the second quarter. We bank on this, but we're not immune to anything happening in the market. Let's see how certain things develop. There's still new news coming to us, to all of us, I would say almost every day, every week. I think at least we can say we're on a good trend and we are positioned very strongly to do whatever we can, whatever is necessary, whatever is possible to offset some of the negatives.
When this market rebounds, especially in North America, but also Europe, I think we'll rebound a little bit going forward to profit from that as well at the full extent. You're welcome.
We're now closing our question and answer session. We'll now have to give the floor to Pieter Klinkers for his final considerations.
Okay. Thank you very much for spending the last hour with us. I look forward to seeing some of you, hopefully many of you, during our investor day that I've talked about before, where we will have the chance to see you maybe face to face and give you some more input on what's happening in the market and especially what's happening in our company and how we believe we will be able to either mitigate that or also profit from it. For now, I would say thank you very much for your attention. I hope you enjoyed it. I hope we were able to answer all the questions you were asking and looking forward to see you soon. I'll speak to you soon.
The video conference for the earnings for the second quarter 2025 is now closed. Our Investor Relations department is available to answer any further questions. Thank you for the participants and have an excellent day.