PACCAR (PCAR) 25 Jul 232023 Q2 Earnings call transcript

Good morning and welcome to PACCAR’s Second Quarter 2023 Earnings Conference Call. All lines have been in a listen-only mode until the question-and-answer session. Today’s call is being recorded and if anyone has any objection, they can disconnect at this time.

I would now like to introduce Mr. Ken Hastings, PACCAR’s Director of Investor Relations. Mr. ahead. go please Hastings,

this would Officer; on welcome is the of and President joining PACCAR’s We Executive Feight, phone Harrie Controller. Brice Officer; Ken listening Poplawski, and Director Schippers, me And Relations. those webcast. Chief Investor are like morning. Preston those Chief Financial to and by Hastings, morning and Good My President name Vice

mode. of Certain prior general calls, that presented and in we the members media results. conference any participate risks on affect with may be As a economic will that listen-only information today involve conditions forward-looking line the ask expected and and competitive including uncertainties,

information, page the additional For SEC see Investor at filings Relations and please our paccar.com.

would to now I like introduce Preston Feight.

Brice update customers provide I Schippers, who great financial transportation solutions Hastings, good continue by in I’ll quarter second PACCAR’s deliver morning. you and best our and thank excellent Poplawski, will world. our business results highlights. employees with the and to saying the start Harrie and trucks Ken to on you Hey, results

second PACCAR the net PACCAR’s increased services aftermarket to billion. and business, financial revenues due to of to and trucks, XX% income billion. Net parts healthy in excellent revenues robust market $X.XX strong increased achieved demand. continued performance new its XX% record income portfolio $X.X quarter

Truck, from of year. period year. profits at XX.X%, Parts’ PACCAR quarter million, Parts’ last the second excellent XX.X% quarter and XX% second revenues in in same than margins XX% were were $XXX pretax quarter second than increased $X.X billion. other by up last to the more higher gross the parts

research range their successful premium in right development a of programs partnerships the optimize business, as as aftermarket our trucks, them overall a PACCAR’s the margins provide and our higher industry-leading of to result structurally innovative help operations. with and growth. delivering our global and is our customers and products and result parts technology sophisticated investments of new PACCAR

fuel the clean announce PACCAR’s partnership portfolio excellent pleased also develop Kenworth we’re to battery Toyota profits quarter, to bring our second excellent expansion Peterbilt achieving portfolio to and combustion, million of and an an of cell, with hydrogen high-quality Financial strategic trucks. had of truck future. the to $XXX hydrogen diesel During cell-powered emissions and the positive our fuel zero hydrogen and company Powertrain quarter, PACCAR customers and its results. technologies position electric used for due market

this is market to truck tonne European XXX,XXX expected year. a in we of the Class XXX,XXX at to in and American XX Looking truck has to South a year. of market. US market that XXX,XXX range of the vehicles We been increasing project to be range above the trucks. in range estimate The in XXX,XXX Industry be to market to XXX,XXX Canada, the build XXXX be gradually XXX,XXX this And X units. truck

X.X% South XX America of share done Brasil a has first achieving an year. growth. record excellent ago, business is the years the market important an region this growing we DAF opened for since share months geographic six job in PACCAR’s

of and rest the are remain this continue to year, expected PACCAR the truck As to healthy and excellent we deliver look forward to XXXX, performance. will markets

Services an Harrie Financial PACCAR PACCAR on business now highlights. and Schippers other update will Parts, provide

to second Thanks, XX,XXX XX,XXX We production. quarter. occasional is of third range to limit in Preston. XX,XXX during estimate trucks delivered the be supplier though still trucks. PACCAR deliveries shortages Supply improving, the chain quarter

normal quarter shutdown delivery estimate Europe. The in third reflects summer the

of Parts We quarter PACCAR’s be reflecting quarter. parts Truck other business. PACCAR estimate in continued margins gross XX% to second achieved high-level margins XX.X% in and strong the gross range, the third to truck, and of XX% performance

by a sales XX.X%. customer and on range quarter track and record XX% and its providing growth, its of the high with compared its results. second achieved gross quarterly profits to Parts period focused margins base, profit is driving last Parts year. Parts full sales PACCAR by is continued technology-enabled strong The expanding solutions of of excellent PACCAR business same XX% growing transportation

five XX%, last XXX%. PACCAR. sales and high-growth, Parts annual have structurally years, of beneficial increased business as by grown profits by have Parts performance Parts high-margin is the The In a to consistent

Third quarter to are X% period increase the Parts last expected to same sales to X% compared year.

increases like is customers XXX Each centers, distribution growth dealer independent of and continues and same year. PACCAR number expand TRP from XX a as Parts’ Massbach, inventory next network and distribution stores, or of parts open center innovative the dealers will locations Parts the well day. e-commerce and than receiving systems. supported distribution technologies new X,XXX benefiting new by Germany managed next to center more dealer as in on PACCAR a

larger Financial PACCAR PACCAR Financial The quarter credit truck strong. solid another superb quality very results. a second pretax Used excellent Services year. was good benefited Services truck $XXX income quality, portfolio have business is million. and its and Financial portfolio used good but historically moderated, are With having from prices

PACCAR $X.X new technologies performance of billion expanded investments many line-up in industry the to trucks the decade. the and will products past during most innovative for have new contribute and impressive and has These invested created excellent in years. facilities, newest and

first expenses expenditures improved year. year, million. capital the be same $XXX industry-leading Capital to PACCAR’s to million $XXX projected research year, $XXX the an million from are return to are XX% $XXX in development of estimated up to the and to million be and after half tax on XX% this last period invested in

highly technologies company manufacturing future. Parts best-in-class the today of for PACCAR’s operations, industry-leading truck for and Financial the the Services and line-up, and well advanced businesses development efficient position continued

answer We’d questions. to be pleased your you. Thank

Steve, today first ahead. Steve please question go is Thank Instructions] Volkmann Our [Operator from from you. Jefferies.

Your open. is line

visibility you the XXXX much and robust how be question. since if you you know willing a that Preston, know thoughts for curious being additional Great. robust on confidence it much brought you have can year? might guys how orders Do any do you a you, for I’m provide to Thank up, you And year? be guys you ‘XX? know XXXX have

good on to with expected having good. and LTL, so we’re year. and are out and a be is demand our world, conversations their great markets XXXX customers, and going great Well, I’d are Steve, healthy being you. from. sectors be question. what vocational that great to The Thanks have see it’s for some around needs for are exceptionally and That’s going otherwise, saying full us to strong. we what the there talk right continue conversations There we next be that for going to is to around place be by trucks now are is the to start to for operating the order be

curious I’ll ‘XX any you down the to about on amount, if But again higher pivot would be Maybe ‘XX. structurally talked margins Okay. decremental a look think margins, there I’m you were of guys was if decrement? year how sort a in

great customers, call. do of which high-growth, of all with know XXXX a that have contribute outperforming; Well, think significant, products growth significantly North guidance in The a in this a transportation up we job high-margin, ago years PACCAR right. which a the we those made; solutions And you PACCAR I to few new being compared we’ve though, things doing product don’t provide really the fact Europe such medium-duty that are on structural in great we have hit trucks and in is point, South a for America, the to improvements are good Steve, significant; you our is industry-leading future. technology-driven is America; Parts the provider investments

it. guys. Thank Got you,

bet. Have You a good day.

Thank you.

from from Tami, is ahead. please go JPMorgan. question next Zakaria Tami Our

open. is line Your

you so Thank morning. my much Good Hi. questions. for taking

like year, quarter my for So question have said, deliveries first into probably your order since is, this visibility you well. are books you as full fourth

or delivery the year? think should quarter deliveries about Or So the sequentially versus better possibly highest the how be should of quarter the XQ third XQ? fourth than quarter we

strong the What would being second Yeah. second half, half and backlog. Tami, full is half about the the I second with a think

to you differences and We the in that being be have constrained have affects a holidays the still QX the in In periodically America deliveries there’s in increase that on markets market item at pacing affects some trying to in terms QX, in in look so know base. But, things. its shutdowns build. North and well. in QX, QX has will general, as That we QX. and so summer may Europe more us else, continue everyone of supply somewhat as and You

you And then, Thank on realization back in was decline sequentially price for can realization you. the trucks you do and comment half? quarter? And it. what price second Got the in the to expect parts

one. that about talk of kind Harrie let I’ll

XX%. up trucks offset Pricing increases of magnitude increases of quarter still parts, higher, cost second significant price parts around for for increases then trucks. of cost in X% was were but XX%. We for little by And than in for a order the the more saw

– comments any And

So with that –

half On the outlook? back pricing in

I and think discipline. all Preston with structural good improvements products pricing that explained, we’re No, a in to position the the new maintain just our

that shared expect Harrie QX, going. we think analysis the I in you testament to we price-cost XX% think of a kind and that’s And how of I XX% margins know see of

Perfect. Thank you.

day. a Have bet. good You

Thank you.

Dillard question please next Chad is from ahead. Our Chad, Bernstein. from go

is line open. Your

guys. morning, good Hi,

balance? thinking spread? about pullback to managing material think So enough actually about back to in price-cost you get you for next market need think to seen contemplate you you as we’ve as XX look over – price-cost and costs, them strong you do know raw you’re you’ll the how that is do also that months the think increase Or understand say the you

terms. don’t I it spend guess as much thinking about in we time those

the in relationships we’ve we strength of shared and performance our We to Like customers, that at about bringing of value thousands the are customer. trucks these customers, of trucks providing as terms which it new continue the the the of product that economy, provides think in there’s is our the drivers the with to X% have to least benefit want. and dollars fuel you improvement thousands know before,

you much to that in some ways buy a us and think customers PACCAR’s side decision are in operations for I that and product the Cost. labor so is follow which on good of a good trying pricing products, look premium and as as world market. best positive brand position Well, us, at as costs and to the pressures we And it. cost get our a gives the still around us something around other see movement the you their in make know

little So it’s a bit ambiguous.

it. Got

just second And question. Okay.

XX% grow a of order like calling coming we business not But, ability So for to should there environment? year, about I’m the are are some the in how it in an your forecasts and to production holding Parts you cut know on think your something that. of certainly industry such

several I a lot. business One day think it’s parts is our ability or the growing to has in to our is the changed get same reasons. customers for day Parts because next

desired the parts to go are for we So place people. for

we make have like think by that they I customers’ think application it. technology and parts And that need needs our is an our right been the dealers enabler how sure support. our well, of has think we understanding team as I about that the

them So, go-to all through that parts leader really the provider, transportation the in for solutions customers. helps the the us Parts a think which grow we’re is And years. business makes space, and of coming we that source

Okay, thank you.

bet. You

you. Thank

next Wertheimer please Research. comes Melius from Our from ahead. Rob, question Rob go

Your line is open.

morning, you. Thank guys. Good

Hi, Rob.

from mechanical market-based with have growth there body expect already how Just are whether you or or containing general appearing question may open come or uncertainty? that strength back then capacity Are you forward? any other the a of question just construction you trucks, whether other on all vocational bill issues? on infrastructure still and real year building constraints And seen that a at on typically orders there Thank holding some you. market the on for the

Yeah.

and we on all relationships close the the And book. think how those question with the we about customers, So relationships our time. carry have order on first

ahead deal and a So general orders, on place to what like in try the XXXX. pricing world before orders and some basis. customers a of want We customers to we to not get look going bit understand case-by-case with release we little is those already ourselves want multiyear in

to will the next so, quarter that up. start free So or

standpoint. many – market, they think I as that, exceptionally bodies it strong a from is the trying bodybuilder There as on In build to They’re now. the terms vocational right is can. about limitation of

We’re and we as vocational we at building think the trucks beginning we’re many of as can, that.

for continue continuing. quite investments So America into are that, will we as that time some think

Got it. Thank you.

bet. You

you. Thank

Our ahead. Evercore today from from please next go David, David Raso question ISI. comes

Your line open. is

volume you the midpoint, for just baked get time. quarter, I’m trying the third sense the The business, a Thank Parts Hi. up of to X% the in.

first Parts. pricing was right, up The quarter, XX% in

a little bit a were You you little. drag, of know currency had up so volumes

in up The given that second sure comment, all not Parts. quarter, volume price I’m was at

down assumed sense a you giving the the and in then price Are just to volume. back have I’m X% of get total? quarter, third the to you third The volumes year-over-year quarter the

into X% average. the have than growth, growth we to to growth to especially be to is in quarter. the a last you we to And expect account, third saw our quarter, XX% third X% which Parts, is this what with excellent So that year strong and year, take year, David, above the last in long-term very X% in higher X% XX% the

Okay.

the is there I’m can volume about implies just fourth similar to price so understand slowdown comp, know the Is something the up third. the again, understand of But tough So that volume to issue. and understand only pricing? going a that I quarter I margins. it’s trying bit cadence just the is negative? the Or how so better model kind volume/price mostly to I between

I David. wouldn’t a slowdown, call it

growing to entire X% is year. performance an by team. the Parts’ PACCAR to business for That’s Parts X% quarter, the with XX% the think the XX% in excellent I

not of X%, volume that down I’m get of the to a that volume volume all price decline? is I’m than just Yeah, the is Or In that versus get I’m the to rest negate trying thinking the and price? all. you’re split. just trying about refuting. the up year. up more to it sense That’s price

Sure.

Of of a and it’s volume course, price. combination

Yeah.

could business, that Parts not it of like maybe to pent-up look of forward. into you’re the we’re getting that’s get you people’s a trying of that And inventories and kind of really. for it right Parts in say the David, and macro, dealerships, there customers. pressure side some the been side Truck the looking I businesses, If now on on the was lot flow And at met think going at has

That’s fair.

Okay.

sort Parts? the balanced Parts of the after normalizing hopefully you’re sort idea? the then Is heavy on just end of of we’re by of And So year last the the kind year, here that stocking.

growth it over then that X% with to aptly growth year. you guess differently see next X% I as being Harrie And in that we it. say year the quarter full say again a the and think I said, steady third just growth

is the business doing So, tremendously well.

you. one thank follow-up. And Okay,

Thank to a the Or quarter traditional time at up know recently? we open for return ‘XX, that or to we’ve books six a a full are you. On for you more order do like more months looking done year? the

part and year of general like we’ll the the release what look looks into we decide first like think we’ll what is, I do that at as and part pricing. the get year first the of the

Okay. I appreciate it. Thank you.

You bet.

Thank you.

Cook Our next ahead. Credit from Jamie, question Suisse. is go from Jamie please

open. Your is line

normal to back know to the is market? XXXX? because half, share, Nice morning. of supply Can I’m I was to chain questions. back You back I where gets – Good if for Hi. limited the normalized sort guess to underserved wondering full by know you just supply two for the talk in supply some constraints degree potentially, and if or you know XXXX, you if to that’s you’re One, chain markets still. a chain I more year know tailwind levels? quarter. delivery mean production that on we’ve

happened, you And know to order know potentially market I biggest the market then my gains Thank where sort assuming just question, second gain if give has for give you you the the And nice markets you opportunity South downturn you and year? know view down in of just to share can is had what share? relative broad – Could next improved book you. be it’s on PACCAR America. what share your would market – some

modest supply agree level – your of around in provide market and part does do constraints the is Jamie, you, modest with that at level, tailwind first continue you. talking good the that some XXXX. to with a the I question, I So think really

like second think know, question, has side I But on maybe the thoughts of Harrie something on your I don’t – or it that.

market world, America. result market the yeah, think growth year a South that. we’ve market half we’ve And around many in we in I trucks is seen as strong and this Well, the building share, so been share first can of as of share

had expect start and across the world. growth as Market We slow during in we expect the there. progress year, shares the opportunities year. have further of opportunities Europe we a America North growth But

say then Yeah. has supply-constrained, To increases, see we build percentage percentage build our as which you nothing share like add is into And our demand it, increasing. products. our I know grows. but strong the would And been market for

really out. just just to it’s get that So to being associate about time build that’s to take us demand, some and the going

you. Thank

You bet.

you. Thank

from is UBS. from question next ahead. today Fisher Steven, please Our Steven go

Your line is open.

thanks. Great, Good morning.

So will to assume margin help some QX I shutdown just us factors XX% gross underlying the a you your the there? of within forecast, headwind. can with XX% be European

mean a could with – mix that? Or factors mix how of or that tailwind us of tailwind? there a to a kind are of just Maybe What new the that bit from consider? models in range. is does kind stays that still of of Trucks buildup Parts So other that versus you is help little offsets

steady performance seeing I You that’s into between with kind continuing. market on a strong know QX, lays Truck it’s Parts strong which I of and Trucks what that performance. the QX happening pretty see side, think in Parts and from think in and I we which we’re And market, the mean is

we’ve If just look it’s the that. the quarter. seen a at in quarter, third echo would of I I probably second what continuation

be of are XXXX? for about preparing Okay, cycle guess this? plays if that about release you are the I you of you then Are chain the American the with about terms do there North how think And people talk some as are out that’s cycle. for How how thinking? strength up demand that? capacity planning to sort pre-buy going There’s Chillicothe. record in capacity XXXX helpful. of in is and of a the supply kind And being you expansion thinking this needs, of had this rest

that just all us the a we Chillicothe, would building doing making it XXX,XXX get and and increase good capacity which what we to I there square time, helps that Yeah. of the is level-up. next we’re investments say product Chillicothe and quality of did what increases into a foot in It’s high is level facilities expansion more out even just example to efficiencies. in do our

said, From we do. Like I a build-out standpoint, just it there. doing that’s what we’re

We’re making in Columbus. investments

world in all investments in the around making We’re America. Mexico. South Really

growth see we of So, the the that that and we in sure prepared for with we’re factories. to so make long-term, want PACCAR the

have supply some work with them we a we’ll From base continue capacity. provide had they with to standpoint, we have the We they’ve couple suppliers. expect them great there, and normalization sure circumstances the product need. work of to can they the I’d make years. sure to closely make in Obviously, past that that unusual closely

Okay, much. you thank very

You bet.

you. Thank

Our Tim next go Thein question today comes please Citigroup. from ahead. Tim, from

Your open. line is

Yeah, Preston, the and truckload morning. reported. know you Great, I’m business, mean pretty utilization they’ve be – it’s thank just pressure you pressure curious just, seen know a know I listen another guess, American companies in of and if I on think you I North one some have just But focus. of you. some that to lot public profitability. Good on Parts a you the will terms of yet this

chugging I’m and know curious is I’m rebuild have from there’s signs just, that or or kind pushed dealers maintenance know right warning profitability, either seeing in of curious your through get of signs team you? of that kind Or any that? time that hearing been truckload your the not you’re of I’m hearing some you But get or that sometimes terms that? large it when just of messaging curious is it’s conveying. business or feeling lot it’s know that you’re what just out you’re on you you discussion fleet just your get customers. real was on intervals the any the customers the may get what a to from pressure a they’re extended just you positive that specific you if

Sure. Great that term. it question. to Good broad in think about

in comments they’ve our come You have relationships truckload you know with earnings heard their and and in standpoint, I calls, think them, through. from their as carrier a we,

I seen signs utilization they bottom be terms think in a that of have rates, are that show also them for tough will but truckload say improvement of there the few starting to may things carrier. months kind in of it, and and of

But that’s market. not the whole

continuing continuing market be to duty. as be see well We strong, also strong, see the medium the we vocational and LTL to as market

expect So, coming a see the business as quarters. then from we’re that total we businesses this be in aided even the see steady, position And strong carriers their continue. that truckload that improvement may in standpoint, we in, to and

and how year? big – the more seeing American-oriented to appetite board at across or it, Is okay. fleets. board then And you that your you least that Got this fleet historically, more about North small, there of as pretty within well Is know about you small sense. of shifted your know your just balanced do backlog. within carriers the what out, truck again, mid, has PACCAR, the OEM guess And mid-sized some – towards the makes know are kind for the think you your investment think peers ‘XX? large you more you But against large-sized know order order large you certainly I question. And deliveries have played fleets

market the large. – it’s You I and vocational way carriers you think representative truckload of came know at vocational it kind than of more rather the I versus the and think small, over-the-road of first mid, through the

mid, I there’s sector. large variance that small, that within think

it. Got

Okay.

Thank Very good. you.

Thank you.

question Our from Deutsche please next go ahead. DeBlase from comes Nicole Nicole, Bank.

open. Your line is

US production just up the a thanks quarter? third so starting down XQ European bit Maybe little Is Yeah, midpoint Q-on-Q. for flat projecting your with the XXX% you’re in a that to holidays, the driven effectively delivery at by outlook, question.

of Nicole. out. Europe X-week shutdown that three production correct, every weeks has takes It is summer a And That year.

all some by of the higher And that offset in world. parts is production of the

Okay.

point? on know for the that actually the demand hydrogen talk bit with you at then fuel hydrogen hearing level this And understood. can of a you the about customer just relationship cell fuel you’re side, Okay, spirit trucks Toyota little expanded in of cell the

infrastructure trying Yeah. the it’s of clean regulations That’s the out question. It’s whether like to be the are great a using with one diesel, them, to – choices know they’re right, like a they’d be understand develop, electric. It use combination customers battery to can that will both to seems coming, front going in the fuel a of whether going it while they hydrogen above or hydrogen all some combustion, or is of a whether hydrogen for for while. cells some

days, think bit And is already. of interest an that on strong fuel so will I I balance different Toyota expect quite explore Obviously, all they’re they’re trying to to technologies the of of people that. behalf trying for inquiries and cost a total ownership they’re would there than and that cell right orders to early Peterbilt we’ve the And and and got more Kenworth learn think and project, convert. trying now it’s this I for and

Thanks. I’ll pass it on.

you. Thank

next Jerry, ahead. go from is Sachs. Jerry Revich Our please Goldman from question

open. is line Your

if product competitive if brand set on have in and what’s in wonder you just and prior discipline help talk the of next thinking I’m you’re road truck ask, much is Preston, you morning $XX,XXX It market, you up fuel had gotten at $XX,XXX. a about I acceleration? opportunities efficiency above afternoon. are premium higher automation. wondering I like now per could Good could map? your Because from of you. profit in how the always hasn’t the Can the good us versus development you feels on those platforms return how know the understand it maybe you incremental improved here that know know set about you’ve areas that getting folks cycles. that stands driven Thank you just you improvements on improvement

do question. are different what past that markets. years investments the in several bunch off. think we’ve the Sure. the of Thanks I over for paying made off a I paying are mean

off only that benefit fact because in is truck that. and it we’re better for great aerodynamic the customers within complies able profitability driver get fully with and DAF that economy. benefit, It benefit a great provides have Europe, that fuel sell paying So dimensions in the at in a ourselves, with compliant higher price to provide mass the we

a Similarly, that at XXX job in Kenworth doing economy of and leading industry’s a as different well. fuel the and Peterbilt, medium-duty the space launched benefits customers. And our are TXXX great new and level medium-duty give providing us customer of the products for the we then new profitability

taking So America, all of contributing. to area growth I are where also South things us level. those And profitability add, a our structurally-improved that’s kind should for business of is a

see we So that sustainable, are long-term these advantages.

to solutions. second investments we are the be have working continue think future. forward. couldn’t to will on than transportation Well, and about excited your right question in of that about then of And more we things we’re a we the of part going that the just suite now set There’s standard I whole terms premium trucks

in Really the an year-over-year flat and be of the about given it know see line much sequentially interesting SG&A And from SG&A was off top SG&A standpoint, pieces down thinking Super. base? we to one-off should growth, quarter? any then how as XQ the leverage this as you

run Yeah business. the tightly. we how SG&A continue control our to expenses That’s very we

we’ve going efficient it’s offset controlled SG&A So there, and but by spending level and, going elsewhere some to increases is forward being more us. here very seen expect what a from you’re

inventories Harrie. Thanks, dealer ability up dealer and spoke up remarks, your, at your last In Where stock. on-time A your know the facilities the deliveries And the new to you prepared are year ago? one. of versus just inventories you then levels versus improving, and high-volume runners about dealers’ are year it ago runners? service a assume Is to stand for a do fair level today

things Yeah, ameliorated constrained – inventory, were year a ago, been that tight that I that’s fair in and observation Parts some think to terms percentage. that’s and a of it’s pretty maybe

for people good customers, that’s more always So out their quick in done is we’re service for. what is helping way our a which get which

Parts And of inventory we up, levels the second record have as course, Net-net, inventories gone sell more. quarter. were in at turns

have customers. satisfy to So to the we that need our continue inventory

overall we Parts it’s And our us as helped share grow business. of the

you. thank Great,

you. Thank

Elkott Matt from please go Cowen from is question next Co. ahead. Our Matt, &

Your open. line is

and good thank and Good morning you. afternoon

Just Europe. a follow-up on quick

obviously over least by technology know the primarily side Europe and guys is few freight intermodal on quarters being have – last reflected there. driven that’s broadly, face European in advantage intermodal You times, economy on Because in and some you the the side. does rail technology? at the But the a at outlook challenges

you’re we think year-over-year, performing has felt saying in maybe is that bit what advantage economy the that the do so the is to mouth imagine But and new are down that truck think our European can – you – a Europe. like we that I kilometers I well little think that. that’s has recognize is

follow – fuel another Toyota the on cell. then And hydrogen follow-up side Okay. with

have been opinion most is somewhat partnership, long-term. we to technology coalesce of of that know one it guys market could the be Do the you know viable Or hydrogen, you around does whatever that? bridges think still cell engines change? You a the you Toyota ICE fuel

still No, it can I we do think be think that a solution.

yet different it is ICE hydrogen the that agencies. different North product. a battery American Europe, Again, determined allowed still we to for That’s space. cells think I of the discussed there as has emissions think efficiencies ICE in that electric. not be allowance. efficiencies depends with in is and upon hydrogen and regulatory ones fuel zero It with Like

the right. conversation of on a early do to bit is important And going and engines right that’s for We a driving think customers a we’re to that will it’s those one think which think make total that’s part the and of the cost I for because we be out of really through So level significant best explore the it’s diesel our call ownership work years of come. for. is that that we what now. to be And what all figure

supply generally in final eased a Got Yeah and a it. disruptions still see levels if quarters. I have way is clarification. are into know there know And you just gauge chain back one guys line next levels? those to you recent getting to far pre-COVID sight of But how from we year?

more to increase good their the Nobody as to there’s of suppliers to wants it. and and them can a do say I would don’t it us. – satisfy as if quickly know work pretty doing to it are capacity the trying or the meet market. a they than gauge way through job I trying

And so It’s to improvement. be a this better in we was that. expect it of quarters ago, far it working than keep quarters the better couple And will I we’re and through come. together, seeing

you Thank very Great. much.

you. Thank

question from next Vertical Jeff Kauffman go from please Our Jeff, Partners. Research is ahead.

Your line is open.

very guys. much. Hi you Thank

want a Just go wanted to item, back then get emission and one [technical to follow-up I already difficulty] vehicles the on there. to zero and

understand up assets like X% it PACCAR up X%, about versus help Could was me differential? Financial, first you the For looks quarter. fleet that were about but

prices years. sales was quite average at the trucks last XX%. over second We couple quarter, the the of gone of up call, bit said The a have pricing during earlier in

Financial, total prices in the well, as assets growth X% with PACCAR the truck for per higher fleet of even course. So the with grow total

when market?” but putting at right. the in told, about Thanks, ACT a the was And All “Well, Harrie. And see was And to you can truck would the vehicles, we’re deliver in And today, “Oh, talking new probably order chance at are orders? XXXX-ish had emission new people yeah, put secondly, looking I timeframe.” it you a asking, I Expo. I

are And of that. I of on kind was and want folks infrastructure like the challenge over back have just some push feels electric what follow-up charging aggressive. It vehicle you. to pulling The

battery the But truck of customers with idea an what And electric fuel cell. can us update likely is on maybe kind of the on answered what’s you available? are question seeing when be give You to going side? earlier on that you

that. to sure, Well, do happy

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in expect of We on the still. to expect hundreds level. what be that the cell fuel It’s kind would I

or then best people the battery but still society. back have hydrogen comments battery pulling be a entire our market. an available, we electric ready thing Your they’re to diesel, hydrogen interest EV, as have there We’ll position What PACCAR on for whether is strong the infrastructure suite through combustion. electric, we’ll cell, fuel needs EV, products, is that on see not, will and be is, that worked

We with future. and customers to closely and puts support be and how PACCAR’s that perform. work technologies what position could of regulatory does our support with agencies and more the them to for a the future for work the we we’ll kinds them about great in us So not excited

you. Thank Awesome.

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Our next question ahead. Michael, go Bank please is America. of from Michael from Feniger

Your line is open.

Thank returns cycle? freight observed you. is younger your to replacement than or Are It’s think higher Preston, some in Truck given other that what are traditional fleet in if moves Or any the operators you we in that the normal purchasing what patterns keep maybe suggest normally higher replacement market historically. the maybe seeing we’ve freight anything terms the demand market a of market? customers’ way is the there transportation trying changes actually trends a and fleet?

right. the You’re by trucks produced, more to people are it helps think providing people level. are fact will of sooner higher that be advantages, being think renew a the importantly me it. fleet that their do used which is than I PACCAR But specifically operating maybe cost to at to want

X% a Europe, Kenworth good so a it’s that get you you plus is economy in want satisfaction or higher, or a fuel benefit the is and truck, If just the value replace Peterbilt a business from DAF the to decision. new high driver just in

we think I turns more see happening So frequently. those

Curious of this new mentioned kind used Or second production? and year? the the in more on spread call the you’re out pricing values truck half your how of normal? the still values in used than truck seeing earlier truck playing you have pricing truck yet a that Helpful. And you basis. of wider moderated, moderation normalization historical values used Do in find just of between high how used is a

compare high even used used year prices to truck of probably normalization healthy extremely prices. about If not Talk and were a we the truck back ago, for market.

think And trucks I used normal it’s to us out our help used meantime, premium centers customers company the used levels. the come sells to a truck to price. that network truck down at XX And a the finance built we’ve very in trucks. company, of retail used that have prices sell more

used even back is get the pricing So slightly levels. used trucks truck that company moderated to able the well we do to profit at continues sell finance levels, at a and

you. Thank

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no We for you. have closing further like would remarks. questions. I to back Instructions] any [Operator Thank hand

call, the We’d like for you, operator. to and thank thank everyone joining

call. joining Thank for you, everyone today’s

now your disconnect a may day. lines, have You and lovely