PCAR - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to PACCAR’s First Quarter 2021 Earnings Conference Call. All lines will be in a listen-only mode until the question-and-answer session. [Operator Instructions] Today’s call is being recorded and if anyone has an objection you should disconnect at this time. I would now like to introduce Mr. Ken Hastings, PACCAR’s Director of Investor Relations. Mr. ahead. go please Hastings,

Ken Hastings

this would Officer; on welcome is the of President President joining PACCAR’s We Executive Controller. Feight, phone Harrie and Michael Officer; Ken listening Barkley, 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 Vice name Senior

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

information, page Preston additional the Feight. see I and to filings Investor of introduce For Relations our would please SEC paccar.com. now like

Preston Feight

Schippers, update very I’ll Harrie morning. you and highlights. and Barkley, first good Michael a business results quarter on Good

employees services to the spirit, world First, and trucks challenges PACCAR’s their sincere years to goods upbeat past around my and hard throughout communities. our dedication, that essential the provide outstanding work, delivered appreciation for they’ve

achieving services last choice and dash feature $X.XX world the X-speed configurable The and transmission. In began Peterbilt expect and for two feature new aerodynamics driver April, Now, a PACCAR’s XXX with and these record easier increased Peterbilt other wider a excellent income electric first PACCAR to In production very efficiency. increased TXXX we Kenworth art new product were the display. the year They our deliver vehicles right a optimistic. quarter reasons a be PACCAR assistance out These to a truck, advanced Financial in is quarter, of PACCAR LED up Truck higher portfolio trucks. displays. lower Kenworth Model partners and $XXX their to safety its and appreciate coming DAF headlights, CF lineup. with producing new Next medium-duty to and first of in get and applications. and first first CATL million, a to provide customers PACCAR’s new will from models. million. Truck battery In the heavy The revenues engines higher of new launch forward, with as sales technology quarter. truck gross features feature first excellent $XX financial Kenworth new quarter quarter X-inch the and year. Generation configurable enhanced for and interior income Power. Romeo PACCAR XX% in tremendous profits PACCAR trains an visibility and PX-X medium-duty cab state premium and PACCAR have strategic new to pretax XX% XX% systems, new introduced trucks, vehicle PX-X electric April, and net trucks the these partnerships battery net XX-inch makes revenues XX.X% Electric drivers interior In great automatic owners the Parts million. and best-in-class and X% good which has Peterbilt digital two record months. delivering moves providers, cab, $XXX power to that Parts new These fuel with into quarter, it truck Peterbilt first heights, a many increased their vehicles billion. and enhanced the new margins Parts have performance income. period Kenworth great same of And introductions. had XX.X% and pretax increased to $X.XX than beautiful duty many the deliver February, revenues and having And achieved billion,

demand housing the Harrie to the and Schippers, to Financial Services update expand GDP truck Good shortage U.S. U.S. drivers market will PACCAR increase of in and provide business be be X of the X.X%, market to projected Harrie? automotive to The XXXX market The an Canada high to trucks. project under recovers, have industrial sectors Class XXX,XXX to premium XXX,XXX other tempered truck XXX,XXX size to the is created production economies by European semiconductors. to trucks. XXXX increase range a European are and Economists UK to strong utilization and As on for Consumer this expected spending, supply grow are GDP and Parts, will each GDP PACCAR’s European The UK has estimate of range also market expected a freight X.X%. the economy We increase year. strengthened. of the PACCAR X.X% and tonnage, strongly. XXX,XXX and now trucks. highlights. industry-wide

Harrie Schippers

PACCAR’s Parts PACCAR Truck, endless over quarter. the delivered of gross Preston. XX,XXX margins the during the quarter increase despite was an improved supply in Thanks This outstanding production This and X% purchasing and of production, to quarter. trucks first fourth XX.X% teams. was enabled all a efforts Other by first semiconductors.

by world profits and levels. parts a uncertainty, more normal population billion, year. quarter new similar major supply, has same demand same last increased freight in first quarter $XXX its its factor outstanding PACCAR margins Kentucky Parts distribution in XX.X%. pretax the of in which center and gross sales XX% quarter such and compared to to center truck will open the Parts class investments in level higher customers next of with to also, decisions. a Second period sales a had purchasing were is we quarter, depending opening delivery from and speed PACCAR distribution parts truck in and year. anticipate an new and investments quarter be availability, a semiconductor production record than Other to part margins customers gross delivery production vehicles we dealers, second Louisville, business on Ecommerce at higher the is initiatives the increases capacity, is $X.XX as that XX% PACCAR last connected Each Engines. by first first of PACCAR than strong quarter speed and year, of continue were Parts than utilization, which million, its a Parts with global distribution, distribution quarter a by robust benefited achieving revenues growing all-makes Truck, stores

end quarter Peterbilt year. expect continue Services volumes, performance We the loan to use the Financial over resulted last second was has Financial used to capacity, full Kenworth Peterbilt the the out premium been truck In strong retail strong quarter another XX center and and in North trucks used less values than income has of of used year. March. parts sales year has and a truck lease XX% worldwide. parts with than excellent plans in competition. PACCAR up year. excellent truck the higher portfolio used to be quarter, used ago. and last XX% than resulted first first Financial pricing Selling resale at new retail increased truck million Kenworth sales a to American compared in and to $XX similar The now increasing PACCAR These X.X% the invested and PACCAR facilities innovative quarter, year to our margins. an PACCAR first from its connected open prices and truck compared $XXX the and include by XX% at XX% systems, you. be PACCAR come benefited higher PACCAR’s distribution portfolio business low-pass this and Revenues models, Pretax Kenworth, XX% higher improved to billion market last services $XXX prices well and were quality. $X.X investing the significant in technologies our estimated million to million Thank million, Capital ultra expanded questions. retail to year. center Parts be DAF driver production diesel are have independent and Financial capitalized dealers emissions years. be products We thank to Peterbilt These contribution support of facilities. power driving dealers and last $X.X PACCAR generation $XXX and projected a development businesses to next customers. enhanced trains, new expenditures advanced and in make has answer five billion Kenworth, expenses We'd past their and in truck vehicle research and excellent Spain Madrid, are is during your PACCAR later million invested to decade. new their DAF support exciting for Services. year. million Peterbilt are facilities, and this growth autonomous many investments $XXX zero and projects. to and pleased $XXX assistance clean to truck share in in

Operator

UBS. comes question Fisher from first with Steven Our

Your line open. is

Steven Fisher

Great, thanks. tend to QX historically, back higher Good looking just the QX. deliveries morning, be in than I guys.

for you delivery the just what’s are of can kind the number that to your the go upside shutdowns that see expectations, flat anticipating So, delivery you already? maybe quarter? And on risk

Preston Feight

Steve, Yes, that obviously. we’re question. looking It’s good at all something

affect up right way well. You the There PACCAR delivered the truck undersupply throughout semiconductors teams now. XX,XXX XX,XXX. is brought that we the working think an about so does what all from first in industry of XX,XXX It quarter, the we was – why the I’m and trucks proud as of is industry globally, to who that

quarter, will all by year. in job second work. the part get we and good the the We then to do nice that the expect into begin So, as them improve second continue undersupply of is of really

flat the impact reflected that on second in for as have the we’re quarter quarter. that’s our and some So deliveries could the second in deliveries

Steven Fisher

same see either industry you for or see in risks then on the retail confidence And can guess you Europe, have talk more that more risk you Okay. upside in market, the downside U.S., relative the forecasts little markets? just might you have and a any either bit different about where I you side Canada each

Preston Feight

well. markets both think are the of really performing I

good. economy up. Free Our are Spot customers doing well. tonnage is are Utilization is well. doing high. rates is The

So, of Peterbilt I North order and America. the Kenworth strong orders We’ve think XX% in the There’s a good intake. first had quarter economy. in for we see

intake. So great order

We have backlog, XX% the of backlog. a of the percentage strong

have our as the look pretty will that year. to so and good the confidence by industry constrained able be the will at is probably be for demand the the supply build we products And

Steven Fisher

you. thank Okay,

Preston Feight

bet. You Have great a day.

Steven Fisher

You too.

Operator

from Goldman comes Jerry question with next Our Revich Sachs.

is open. Your line

Jerry Revich

morning, good Hi, everyone. Yes.

Preston Feight

Jerry. morning, Good

Jerry Revich

of versus rollouts. proprietary new increase also, these wondering to terms just content see talk about here on increase the the quantify models, quantify prior that parts willing you new on there what you folks in you might you if trucks be is with an assembly product truck models, you’re gains flagship for products It wondering the the I’m I’m automation so here. and in new typically if you when introducing have efficiency us? is could

Preston Feight

going the this in standpoint, or XXX, lot Model question, new to one I terms I remember excited year of customers. product a performance we so mean, our quite a but is TXXX year we’ve beautiful, mean are Jerry. product and to can’t many for had X%. launches. new about really Thanks introductions, Fuel-efficiency up from to

good X for fantastic product So X, well. a And the going brand as tire and to truck, that’s for new It’s markets product. Class be is X new and of both business the cab Medium-Duty a is in Peterbilt there for degree automation and Kenworth. higher platform. a

assembly, good us, is more there which is proprietary well. good customers. our medium-duty So robotic heavy-duty has count for And the quality, for for in as it part and good and trucks more

all things I everyone. really So think that’s good for

Jerry Revich

the And proprietary for be be And much increase flesh be Preston, to out willing to in any how two you you per Would parts? chance, quantify truck magnitude hours us? expected what’s labor pieces, willing to those that might down? of

Preston Feight

were some we I and it’s more flesh if really Jerry. spend out But complicated thinking you could it. simple we can’t in that I think together, Maybe time a answer, for about simple.

Jerry Revich

business Okay, Can ecommerce please? is to what’s share it you And us see orders, more today? frame than nice of revenue the just you on ecommerce. I about conventional that for that. And Parts appreciate then can talk your profitable momentum

Preston Feight

the the The like experienced really makes place ecommerce we find world other have year have a we to which all OEs parts parts, very easy biggest as is know in great in new – and or in models for ecommerce the that past it thing changing, and parts. people in order with system is even especially for

device. handheld your in that do can You

it can You laptop. in your do

system the up growth in what’s and fantastic And XX% sales. increase to the seen is ecommerce and so causing that’s we’ve

as we the strength a it’s as business So, business. foundation grow And a we doing, for of think, and convenience part to just – the that it’s what to just we’re Parts in it see and general. continuing is

Jerry Revich

broader the suppliers the microchip could if see the look you we in And wondering supply count issues about we’re I’m of the how, at base, obviously other you of Okay. the monitoring experiencing? your semiconductor that we’re as outside picture, where side what’s how lastly, is is supply chain you’re talk shortage words, seeing critical that concerning on might that

Preston Feight

supply around a by PACCAR. semiconductors start job have partners to great world. amazing comes I’d a trying us PACCAR handful. of do of supply back for an This issue and saying They to supplying the and base specific set we just

in our first-tier we’ve so we solve we and that have up our suppliers good it’s located with ways to solutions. suppliers working it our and this, the put future concentration, come and for around looking And And second-tier some for closely behind world. problems, on keep And us. the handful all with that they’re working get to we’re and

Jerry Revich

Okay, you. Thank terrific, I discussion. appreciate

Preston Feight

Yes, you bet. Take care.

Operator

from with Duignan Ann Our next JPMorgan. question comes

open. line Your is

Ann Duignan

chips can does supply quarter-over-quarter quarter-over-quarter prevail, given And you’re everybody. where higher costs chain cetera, assembler, pricing what you like Yes. bit much Europe prices, is little orders pricing in backlog are you morning, right? in beyond your I and et how were do current semiconductor Can you like lot I both seem a also? exacerbated Canada about steel Can and et in regions? just deliveries share know a issues It the of of versus – your Europe? you Good power if more embedded more talk input looked then the your an whether there. input talk down up talk is cetera. costs seeing where that it there’s you’re have, in power But, about know it’s in U.S.,

Sorry, but…

Preston Feight

it. really both then on any that distributed those aware To and That’s the kind would all the great. just I how America handful are wafers industry into and back to make auto as suppliers globally quarter, handful Certainly steel resins, good raw also all between fine. industries, ubiquitous isn’t in make and which translate a can across that’s by across plastics. in true PACCAR the affected about are standpoint, question. that of you’re aluminum. on And From another those who recently, we there’s, It’s differentiation North we it’s impacts on That’s There say and don’t come using whichever in this see second of really first North or affect there in out with really Yes, obviously. your differentiation, of backlog the used materials really and cost is components I without suppliers those truck which semiconductors, begin question America. the semiconductors of markets. that EU chipset for of know and are well cost is saw your the a part vehicle industry. EU,

start we to And pricing advantage do balanced that. it’s so in well right now. we that see think And of kind

Ann Duignan

does is interpret price So, answer? how should higher some input costs, increases your that to I include backlog that offset

Preston Feight

interpretation. Yes, you should, that’s good a

Ann Duignan

leave there. Thank questions it Okay. Since I’ll longwinded. my you. were

Preston Feight

Take care, Ann.

Operator

ISI. comes from question Raso with next Evercore Our David

line Your now is open.

David Raso

Hi, time. thank the you for

Preston Feight

Hey, David.

David Raso

historical think you’re wanted year-end you trying bit see how lay the to And do like, inventory XXXX that fairly? find so is trucks then to the you. as into stronger that or raise like, how outlook, forth. industry to you and obviously, would about industry Hey, where setup? year just your sales, out good the to little part scenario Where second ship morning. versus The do inability you as play you increase the the But norms we outlook. that for Thank see and the willing outlook parts would the parts a because you many

Preston Feight

lot year out think tight. David. see about the there Right it, the You demand to months. standpoint, that is at inventory X.X wouldn’t an bet, in expect we’re through industry as now I that’s given product. X.X for From at relatively of inventory months, change the we a is

fashion. of we similar a enter So, and XXXX kind would think I

I markets, earlier, a customers strong As just strong and that working we they’re the economy, have, they in they truck introduced. have our trucks there’s great desire with our mentioned have for

in job putting in TRP and team for introducing the system, very is carrying making that team delivered. is there overstate the half or performance are factors has see close people that the stores, parts ecommerce the It’s build I which the mean, all-make think, serves stronger can’t that this think probably rational are market built we advantageous a for So, are limitations our has the first all building there centers also And systems in to those lift with And because parts periods get because it important setting I think that’s easy to I time. parts how to dealers, has of it through, just day running to year. parts, well, people distribution done I of our the us. of do trucks team great to a record in plus their that performance longer same and

David Raso

And would for year and quantify their if quantification desired the of some how that new from for say inventory, sales? X.X let’s that increase? that your the normal you months, year-end, that versus, your revenue the for quantify How answer you quote And PACCAR much, was parts last sort until can interplay throughout remains add or of levels?

Preston Feight

I I would is take percentage let part and the first, biggest me of our – business customers. performance and our relationships and team with parts dealers, the the the second your parts of think and

beneath overwhelming. quite that’s I think quantify I couldn’t that.

less, part first normal. than and an order that inventory, But, is it’s a characterize question less, fair from it, enough David. think inventory your to not then so So magnitude of less way it’s of it’s your just probably I on

David Raso

All right. Thank you.

Preston Feight

bet. You

Operator

comes next Bank. DeBlase from Nicole Our Deutsche with question

Your line is open.

Nicole DeBlase

Yes, guys. thanks. Hi

Preston Feight

Hi, Nicole.

Nicole DeBlase

is way you’re flattish assuming kind geography the that? production Q-on-Q, that presume right to from perspective. point that of – a out production each that On is

Preston Feight

parts of with you. some yes, fair depend on but would that at – generalization, probably your we I where a shortages lot spot it we for will to that’s impact, have agree it, Yes, if look have

Nicole DeBlase

in again, the it. into the we [Technical backlog, move move supply able abate, about of gross said make Difficulty] as And chain into half? on some as the margins second ability the margin think these second hopefully then to you you how got do we half, gross and the XX.X%, issues strong productions up to with and improve XQ step Okay, guys

Preston Feight

sequential really ask I’ll But ask margin you on growth began good I’ll margins part the the the think bases improvements gets pleased we’re that. question, as after out a in with, of in growth we half with at you. this and second take question. doing some supply in teams year, margin. in of part gets through and We again, Sure, job we is year-over-year the cutting one. are your a the can that will we first and gross of if your see the then second as we experienced the had go We ameliorated look performance, we that, situation in resolved

We if and there’ll your of part of instructional the help for us in capacity, have be improving think then we you half. build that first of question. think back the with me second just And could margins all to

Nicole DeBlase

spirit on. You you. go you it Thank pass of actually, captured ahead it the whole so and

Preston Feight

day. Wonderful. good Have a

Operator

question Our Joel from with BMO. next comes Tiss

line Your open. is

Joel Tiss

how’s it guys, Hey, going?

Preston Feight

Joel, doing? you Good, how

Joel Tiss

right. All

port bit we that? over little wonder, by sort and talk the of can zero road cycle doing, understand I just you and of about XXXX So, industry cycle, meet kind a us emission without just like shape with things mandates the looks? help and of the Can refuse how XXXX trucks can these

Preston Feight

doing just – in of one new business the the think medium-duty at And truck electrification then very growth things beginning two cycle shape performance in the at introducing, as we’re I on say customers going and nice in One just trucks trucks well, of the steady are to that, is where the new there’s fantastic is, questions customers. really I’d and these our are a new and the we’re is market we’re going our a the to great complement important the are well. heavy-duty the complement be Well, truck of for market, think is doing I in there. well, strategy.

help years that’s to actually. I in think going So, months the coming PACCAR and

an that’s say important would story. I So,

great earnings And second production and battery we products. say The release Romeo meet battery that vehicles. electric our electrification, for which production, with and cell – customers. little was on I can share an around technologies us, applications us have us bit we into because there, you partnerships have We question we outlined your different are for that partnerships a with gives thoughts in That’s have CATL. we part as that important, array to of that different pack put of Power enables with would

eight it different one, requires people battery Some others and day will day types. can overnight, in want and charge for overnight then it multiple a use charge hours cycles that a truck a park

into So, that the port heavy-duty built offering, a we have enable the XX meet it’s trucks. product product of capability else, whether demands or drayage, will our systems, us to that us will which give states offering strong medium-duty anything or California,

Joel Tiss

Okay, you. great. Thank

Preston Feight

day. good a Have Great.

Operator

Our next with question from Robert Melius Research. Wertheimer is

is line Your open.

Robert Wertheimer

Good Hi, morning, thank everyone. you.

Preston Feight

Good morning.

Robert Wertheimer

a an have simple questions. I going lot two and and of you probably saw one, Europe, One pretty good obviously on. just COVID is reported competitor in inventory orders there’s a Scandinavian disruption a

could characterize strength in you you’re European like underlying comment? the wonder there’s and extent to orders, willing new real profound if Just as

Preston Feight

do pay what and Sure, that, close our personal that with I in all. real customers are them what attention their the orders. think know work dealers, there’s And we to we underlying these closely our are. We relationships, strength needs and feel we

and we have their a yes, the needs, clear on definitely backlog. So eye

Robert Wertheimer

Perfect.

just catch not it’s So work, up perfect. it’s a

go profound, it. I I or as two years or get there’s autonomous maybe potential didn’t But a share, of maybe think per willing for bit you obviously you be on not with to revenues revenue idea revenues folks are kind I’m a working service vehicle as it’s what by, assume or guys you’ll go autonomous. how kind decent content margin, of on going a per are streams on higher sure that mile and wonder I simple to if little autonomous, shared characterize PACCAR whatever. the revenue some questions more the you’re far saw cents throughout

any potential could on timeline, the there of you. for PACCAR? update the Just us terms and revenue give in wondering the Thank about you if strategy

Preston Feight

Sure.

have to and early a that partnership standpoint, the On with, we great enjoying with Aurora. They’re really work we’re strategy strong on.

Our the teams time. are together all

about how going they’re that. teams leadership to we’re understand and are together very complicated vehicles, we’d these develop Our vehicles, all talking

others us platforms. partnerships on other in autonomous the We also good the production that with using continue developing are startups have our with to working valley,

is space So, of And best the lines a with work we to able best, driver market which to autonomous to to provide And it’s autonomous to be with we vehicle has space. end would it. platforms our to partnership well. out an of and really the would up our relying strategy autonomous and the the help product technology in customers lot vehicle market that think contribute then eventually on PACCAR’s in platform, and that work going

far development early that I sort that I projections wrong we first bit regulations, feel that work. a feel be should this and let There’s of predicting that. wildly As making care are of think of it’s little out for itself there’s to taken I at to revenue like sure streams, a lot point. a like lot as before work, societal needs be

Robert Wertheimer

Understandable.

Okay, thank you.

Operator

with Suisse. Our comes Jamie next Cook from question Credit

now Your is open. line

Jamie Cook

order And guess sort where double the margin how One, on Hi, of order headwind, that your associated to for last said, I then is good XX% concerned markets what’s and Rob’s were the just the follow-up there’s the with book, the on orders concerned of trying or when market XX I the given supply COVID, tracking sort are products? morning. of Kenworth, to you you follow-up embedding at just expectations in share that costs chain? that just that talked think just quarter, is? are Peterbilt think all questions. year? you And what you about sustainable you’re thought driving I two questions growth? with Thanks. ordering Or rest you numbers, just of Is the in it new understand, about the book on bps

Preston Feight

to those I have down On more that costs associated we stronger have quarters, for the certain also will costs and in definitely as come side, then us down. see some come those and some quarter and startup components, forward. forward, do the over the for last COVID also a second expense expect definitely margins And undersupply continue cost We to Jamie, costs But costs. quarter, think products those we’ll those going with the the products. percentage the of generate probably new new inefficiency going

Jamie Cook

of that’s the of any And the just on sustainability helpful. if then it and double it supply sort just concerned orders, Okay, just chain. ordering because there’s concerns

Preston Feight

think kind about that. to tried of I we talk

backlog. mean, well think like I we we this mean, with is and board them know feel feel solid. order have is the the I like, in customers work good I we confidence it.

Jamie Cook

Okay, thank you.

Preston Feight

bet. You

Operator

next comes Chad Bernstein. from Our Dillard with question

open. Your line is

Chad Dillard

Hi, everyone. good morning,

Preston Feight

Chad. morning, Good

Chad Dillard

cost that? we you half year? So, half, through about can go you Maybe assumptions price talk the your can about your thinking share first as you’re the second and how

Preston Feight

price occurring, we how generally that’s realization we the I would it. continue And and expect think mean, year. about mentioned that to that So, we starting that’s we’re about through think to it,

Chad Dillard

that remind volume hit it think far then line? us to All today, you’re book does you about right. And product in EDR going production stretch how just can your talk high when and you

Preston Feight

first think increase. good right good job right great about quarter. backlog, second us order in it’s the think over to simply And quarter that’s able kind fourth. raise that we’re supply as teams, And the year. now, of that that production trend did production semiconductor the for for book, we good the a And it we’ll stabilizes, getting the thinking that the about I that’s see in builds how

Chad Dillard

Got it. Thank you.

Preston Feight

bet. You

Operator

Bank from Gilardi comes with America. question next Our Ross of

open. Your line is

Ross Gilardi

guys. good Hey, morning

Preston Feight

Hi, how are doing? you

Ross Gilardi

you. Great, thank

Just a couple of questions.

inputs the fact supports readily tightness anything Just that seems available on and view to be they’re in I they could longer of going to for widespread assumed, then become the of readily supply to across just the any number second the in entering components. to previously see hearing semiconductors, term Preston, will seems more critical I some mean, a you are real I you lot semiconductors agreements mean, or your be and in or mean, you more what more seeing general available different long that into half third that of any to news confidence that of flows actually it in other gives quarter? with this suggest lasting, be – recent tightness terms practices? yourselves cope Do procurement the

Preston Feight

down a third have a quarter, think about recovery, unique If in to took fact I confidence have there in I which at it, there was I look that think the the Yes. you’d circumstances storm first two plants our put area. in into when in been construct quarter the the if Texas, couple Austin

And a a had that’s was at Japan that impact. a supplier so fire a impact. there in then big And big

So, those as be that of think the need. and are also the understanding way work to will I able manufacturers that good by lot recover, certainly And there’s a been held. for facilities

along tightness with that improvement suppliers, their the but and quarters, into see that there’ll together, confidence I gives I just third eliminated, fourth don’t anticipate we’ll to is think forecasts, those So us be improvements. going be

Harrie Schippers

that base. PACCAR early where of on supply or well done is needs gave to has we already our very really future get reliable outlook a our

things that also those there that means when start we we’re in will to what that’s deliveries, recover, that priority So get assuming.

Preston Feight

in good can forecasting, just Harrie good you we second part asked and said needs, supply. we the of your also about second a And suppliers job job working so we procurement of question, with do tier practices do with good a then that have our

Ross Gilardi

term this sounds just a in plan that want bit currently it. And on x more you of to your this got it fully transmissions, that sourcing with on the are longer transmission you plan much like verify is new And you is your more automatic win done to the discussed? of an about house product then you’ve good And AMT? making versus the transmissions going from source, you’re just or Allison’s talk a can longer but watch medium-duty Okay, a engines? world, – little

Preston Feight

We have the a our great it. automatic this around – world. partnerships the suppliers this fully and And will torque transmission in is converter a transmission, be

train power goes going it to integrate It’ll our help that efficient space. torque, help the fits part to us a to customer. that’s a to be up advantageous allows us way customers. of in horsepower, very aftermarket XXX And to give perfectly for medium-duty So XXXX stream the for our performance really the into optimize great is pounds into it us. It so foot

that So, all for and good good PACCAR our for together customers. is

Ross Gilardi

making you it partnerships saying this are Preston you? – someone you’re you for this with or And making great suppliers, is your have internally but

Preston Feight

We on are ZF with this. partnered

Ross Gilardi

got it. you. Thank Okay,

Operator

with next question comes Cowen. Elkott from Our Matt

Your line is open.

Matt Elkott

Good inability do reason morning. But ask my that question though any that the question. orders to dealers, know solid different you angle, trucks? be people’s quality some with that pretty a concerned be seems hear see shortage have order it’s you you that even for because – to and driver taking – for of Thank of the you to see might customers you to a here. I I good guys from to is wanted from demand do your conversations cancellations there, equipment the

Preston Feight

their strong the for you We trucks. strong but to see and that guess could to I see means movement don’t that our there with well, need for that their scenario, the simple we means things that be which trucks for well, likely see happening. demand use demand build continue. people is no, we economy This which a don’t. are that buying as is is We doing and freight

business, could use good truck well good our bodes order trucks for So, board. steady a future. All premium

Matt Elkott

just That’s question it. really Got technology more the helpful. And on one front.

a model increasing and your at technologies, consider gone but look autonomy technologies, in bit kind so and have maybe in in another partnership interest the investing through quite been partnerships with the instead given or new companies that acquiring You you acquisition of its far? strategy you’ve house whether energy would technology, consider guys of taking

Preston Feight

the best all at to think on have technologies single is returns that provide for going customers bring global just to and approach We And don’t scale best look take the the We economies our we bear we a right with level. strategy. the of options. a right

Matt Elkott

Thank it? you much. very Got

Preston Feight

You bet.

Operator

Salmon with next Research. comes question Our Wolfe from Rob

Your line open. is

Rob Salmon

And question. Hey, good morning, guys. taking thanks the for

Preston Feight

You bet. too. Happy

Rob Salmon

earlier. to regard the give upside and the chain Can of of are of Or in sense you the quarter With outlook, us a second some to you sense talked monthly there’s similar risk? pretty about an give it supply your a just you’ve Is later downside us throughout quarter? challenges uptick cadence? kind expecting of delivery obviously, kind that

Preston Feight

we’re hard to And that a characterize are moving talking with it’s think around. I things Rob, the I think suppliers. little teams

able parts, the – there’s that and that. and job finding we’re they’ve to as parts delivery a good So we’ve come moderate times increase done of available, to of other cadence and having

it’s to And hard get basis. to so in a monthly

Rob Salmon

Okay, but Is into not characterization outsize way or? it’s a that the of second half quarter. the fair

Preston Feight

supplier back, to a is, It’s then it And where these upon sits. as things it’s the for things it in coming chip not. just no, way batches maybe think No, they’re depends and the produced. about come and

a supply constraint you which batch be might might a while you for somewhere parts, tight else. then of get little alleviates So, the

not So, But think like continuous of it’s flow. more that. a it

Rob Salmon

Helpful. it. Got

the you of partnerships the of I’m to I models up of early see out little PACCAR that or thinking I like depending proprietary – next of kind you kind the overtime? should electrification then kind part on evolving the ability supply with about how of talked if new in decelerate about regard initially? about kind some of guess kind So how terms you effect, do a will, working. the have, kind accelerate the of guys think how is or and that to red-tagging when make And looking bit of earlier you electrification, chain

Preston Feight

that. to it’s make I volumes as going scale do economies think overtime to higher along Question, and content to sense move as be evolve increase, we of

along XXXXs prepared about it. and content partners, the and come see it previously We have of trucks great well grows end. we really at with the probably of trucks working So, XXXs then that’s into talked higher as we’ll

Rob Salmon

guys. color. the appreciate Thanks Really

Preston Feight

Yes.

You bet.

Operator

at from in this other additional are Are company? remarks There questions time. there no the queue any

Preston Feight

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

Operator

call. this Ladies you PACCAR’s for concludes and participating. gentlemen, earnings Thank

now may You disconnect.

PACCAR (PCAR) 27 Apr 212021 Q1 Earnings call transcript