Q1 2024 Paccar Inc Earnings Call

April 30, 2024

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[music].

Operator: Good morning, and welcome to PACCAR's first quarter 2024 earnings conference call. All lines will be in a listen-only mode until the question and answer session. Today's call is being recorded, and if anyone has any objection, they should disconnect at this time. I'd now like to introduce Mr. Ken Hastings, PACAR's Director of Investor Relations. Mr. Hastings, please go ahead.

Good morning, and welcome to my calls first quarter 2020 full earnings conference call.

Operator: Good morning, and welcome to PACCAR's Q1 2024 earnings conference call. All lines will be in a listen-only mode until the question and answer session. Today's call is being recorded, and if anyone has any objection, they should disconnect at this time. I'd now like to introduce Mr. Ken Hastings, PACCAR's Director of Investor Relations. Mr. Hastings, please go ahead.

Ken Hastings: All lines will be in a listen only mode until the question and answer session.

Ken Hastings: Today's call is being recorded and if anyone has any objection. They should disconnect at this time.

Operator: I'd now like to introduce Mr. Ken Hastings, Bicoastal REIT to own Investor Relations. Mr. Hastings. Please go ahead.

Ken Hastings: Good morning, we would like to welcome those listening by phone and those on the webcast. My name is Ken Hastings, <unk> director of Investor Relations.

Ken Hastings: Good morning! We would like to welcome those listening by phone and those on the webcast. My name is Ken Hastings, PACCAR's Director of Investor Relations, and joining me this morning are Preston Feight, Chief Executive Officer, Harrie Schippers, President and Chief Financial Officer, and Brice Poploski, Vice President and Controller. As with prior conference calls, we'll ask that any members of the media on the line participate in a listen-only mode. Certain information presented today will be forward-looking and involve risks and uncertainties, including general economic and competitive considerations that may affect expected results. For additional information, please see our SEC filings and the investor relations page of paccar.com. I would now like to introduce Preston Feight.

Ken Hastings: Good morning. We would like to welcome those listening by phone and those watching the webcast. My name is Ken Hastings, PACCAR's Director of Investor Relations, and joining me this morning are Preston Fite, Chief Executive Officer; Harry Skippers, President and Chief Financial Officer; and Bryce Poposky, Vice President and Controller. As with prior conference calls, we'll ask that any members of the media on the line participate in a listen-only mode. Certain information presented today will be forward-looking and involve risks and uncertainties, including general economic and competitive considerations that may affect expected results. For additional information, please see our SEC filings and the Investor Relations page of Packard.com. I would now like to introduce Preston Fyte.

Ken Hastings: Joining me. This morning are Preston Feight, Chief Executive Officer, Harry Skippers, President and Chief Financial Officer, and Bryce Popowski, Vice President and controller as.

Ken Hastings: As with prior conference calls, we will ask that any members of the media on the line participate in a listen only mode.

Ken Hastings: Certain information presented today will be forward looking and involve risks and uncertainties, including general economic and competitive considerations that may affect expected results.

Ken Hastings: For additional information please see our SEC filings and the Investor Relations page of <unk> Dot com.

Preston Fyte: I would now like to introduce Preston Feight.

Preston Fite: Harry, Bryce, Ken, and I will update you on our excellent first quarter results and business highlights. But I'd like to begin by thanking PACCAR's outstanding employees, who do a great job providing our customers with the highest quality trucks and transportation solutions in the industry. PACCAR achieved excellent revenues and net income in the first quarter due to the strong performance of its truck, aftermarket parts, and financial services business. PACCAR achieved revenues of $8.74 billion and net income of $1.2 billion.

Preston Feight: Hey, good morning. Harrie, Brice, Ken, and I will update you on our excellent first quarter results and business highlights. I'd like to begin by thanking PACCAR's outstanding employees, who do a great job providing our customers with the highest quality trucks and transportation solutions in the industry. PACCAR achieved excellent revenues and net income in the first quarter due to the strong performance of its truck, aftermarket parts, and financial services businesses. PACCAR achieved revenues of $8.74 billion and net income of $1.2 billion. This is comparable to adjusted net income of $1.18 billion in the first quarter of last year. Truck parts and other gross margins were 19% in the first quarter. PACCAR's margin is benefiting from investments in new truck models, good global performance, and PACCAR Parts's continued growth.

Preston Fyte: Hey, good morning.

Preston Fite: Harry brace, Ken and I will update you on our excellent first quarter results and business highlights.

Preston Fite: I'd like to begin by thanking <unk> outstanding employees, who do a great job, providing our customers with the highest quality trucks and transportation solutions in the industry.

Preston Fite: <unk> achieved excellent revenues and net income in the first quarter due to the strong performance of its truck aftermarket parts and financial services businesses.

Preston Fite: Packer achieved revenues of $8 74 billion and net income of $1 2 billion.

Preston Fite: This is comparable to adjusted net income of $1.18 billion in the first quarter of last year. Truck parts and other gross margins were 19% in the first quarter. PACCAR's margin is benefiting from investments in new truck models, good global performance, and PACCARP Parts' continued growth. Ackar Parts achieved record quarterly pre-tax income of $456 million.

Preston Fite: This is comparable to adjusted net income of $1 8 billion in the first quarter of last year.

Preston Fite: Truck parts and other gross margins were 19% in the first quarter.

Preston Fite: Gross margin is benefiting from investments in new truck models.

Preston Fite: Global performance and pack our parts continued growth.

Preston Feight: PACCAR Parts achieved record quarterly pre-tax income of $456 million, 6% higher than the $439 million earned in Q1 2023. 2024 quarterly parts revenues increased to $1.68 billion, and we are pleased with the continued growth at PACCAR Parts after a record-setting 2023. PACCAR Financial had a good quarter, achieving pre-tax income of $114 million. These results are comparable to Q4 2023. Looking at the US economy, GDP is estimated to grow 2.4% this year, with a resilient labor market and healthy consumer spending. The vocational sector, where Peterbilt and Kenworth are the market leaders, remains strong, with continued infrastructure investments. The less-than-truckload market is also performing well while being offset by a softer truckload segment.

PACCAR Parts achieved record quarterly pre-tax income of $456 million, 6% higher than the $439 million earned in Q1 2023. 2024 quarterly parts revenues increased to $1.68 billion, and we are pleased with the continued growth at PACCAR Parts after a record-setting 2023. PACCAR Financial had a good quarter, achieving pre-tax income of $114 million. These results are comparable to Q4 2023. Looking at the US economy, GDP is estimated to grow 2.4% this year, with a resilient labor market and healthy consumer spending. The vocational sector, where Peterbilt and Kenworth are the market leaders, remains strong, with continued infrastructure investments. The less-than-truckload market is also performing well while being offset by a softer truckload segment.

Preston Fite: Our parts achieved record quarterly pre tax income of $456 million, 6% higher than the $439 million earned in the first quarter of 2023.

Preston Fite: 6% higher than the $439 million earned in the first quarter of 2023. 2024 quarterly park revenues increased to $1.68 billion, and we are pleased with the continued growth at PACCARPARTS after a record-setting year. Packard Financial had a good quarter, achieving pre-tax income of $114 million.

Preston Fite: 2024 quarterly parts revenues increased to $1 68 billion.

Preston Fite: And we're pleased with the continued growth at Pac our parts after a record setting 2023.

Preston Fite: <unk> financial had a good quarter, achieving pre tax income of $114 million.

Preston Fite: These results are comparable to the fourth quarter of 2023. Looking at the U.S. economy, GDP is estimated to grow 2.4% this year with a resilient labor market and healthy consumer spending. The vocational sector, where Peterbilt and Kenworth are the market leaders, remains strong with continued infrastructure investment. The less-than-truckload market is also performing well, while being offset by a softer truckload segment. Kenworth and Peterbilt's share in the first quarter was 30.3%, up from 27% in the same period last year.

Preston Fite: These results are comparable to the fourth quarter of 2023.

Preston Fite: Looking at the U S economy.

Preston Fite: GDP is estimated to grow two 4% this year with a resilient labor market and healthy consumer spending.

Preston Fite: The vocational sector, where peterbilt and kenworth are the market leaders remained strong with continued infrastructure investments.

Preston Fite: The less than truckload market is also performing well, while being offset by a softer truckload segment.

Preston Fite: Kenworth and peterbilt share in the first quarter was 33%.

Preston Feight: Kenworth and Peterbilt's share in Q1 was 30.3%, up from 27% in the same period last year. Overall, we estimate this year's US and Canadian Class 8 market to be in a range of 250,000 to 290,000 trucks. In the medium-duty markets, the new best-in-class Kenworth and Peterbilt models increased their combined Q1 share to 17%. We expect this year's medium-duty market to be around 100,000 units. In Europe, economies and the truck market are softer this year. DAF's premium new trucks provide customers with the latest technology and best operating efficiency. We project the 2024 European above 16-ton market to be in a range of 260,000 to 300,000 trucks.

Kenworth and Peterbilt's share in Q1 was 30.3%, up from 27% in the same period last year. Overall, we estimate this year's US and Canadian Class 8 market to be in a range of 250,000 to 290,000 trucks. In the medium-duty markets, the new best-in-class Kenworth and Peterbilt models increased their combined Q1 share to 17%. We expect this year's medium-duty market to be around 100,000 units. In Europe, economies and the truck market are softer this year. DAF's premium new trucks provide customers with the latest technology and best operating efficiency. We project the 2024 European above 16-ton market to be in a range of 260,000 to 300,000 trucks.

Preston Fite: Up from 27% in the same period last year.

Preston Fite: Overall, we estimate this year's U S and Canadian class eight market to be in a range of 250 to 290000 trucks.

Preston Fite: Overall, we estimate this year's U.S. and Canadian Class VIII market to be in a range of 250,000 to 290,000 trucks. In the medium-duty markets, the new best-in-class Kenworth and Piedmont models increased their combined first quarter share to 17%. We expect this year's medium duty market to be around 100,000 units. In Europe, economies and the truck market are softer this year. DOT's premium new trucks provide customers with the latest technology and best operating efficiency. We project the 2024 European above 16 ton market to be in a range of 260 to 300,000 trucks.

Preston Fite: In the medium duty markets, the new best in class Kenworth, and Peterbilt models increased their combined first quarter share to 17%.

Preston Fite: We expect this year's medium duty market to be around 100000 units.

Preston Fite: In Europe economies in the truck market are softer this year.

Preston Fite: <unk> premium new trucks to provide customers with the latest technology and best operating efficiency.

Preston Fite: We project that 2024 European above 16 tonne market.

Preston Fite: To be in a range of 260 to 300000 trucks.

Preston Fite: The South American above 16 tonne truck market is expected to be in the range of 105 to 115000 vehicles. This year.

Preston Feight: The South American above 16-ton truck market is expected to be in the range of 105,000 to 115,000 vehicles this year. In Brazil, DAF achieved a record 10.7% share in Q1, compared to 8.6% in the same period last year. DAF trucks are highly desired by customers in South America, and the region is an important part of PACCAR's growth and success. In Q3 of last year, PACCAR announced a commercial vehicle battery joint venture, and construction of the 21 gigawatt-hour factory, located in Mississippi, is expected to begin this quarter. PACCAR anticipates investing $600 to 900 million over the next several years in this factory to create cost-efficient commercial vehicle batteries.

The South American above 16-ton truck market is expected to be in the range of 105,000 to 115,000 vehicles this year. In Brazil, DAF achieved a record 10.7% share in Q1, compared to 8.6% in the same period last year. DAF trucks are highly desired by customers in South America, and the region is an important part of PACCAR's growth and success. In Q3 of last year, PACCAR announced a commercial vehicle battery joint venture, and construction of the 21 gigawatt-hour factory, located in Mississippi, is expected to begin this quarter. PACCAR anticipates investing $600 to 900 million over the next several years in this factory to create cost-efficient commercial vehicle batteries.

Preston Fite: The South American above 16 ton truck market is expected to be in the range of 105 to 115,000 vehicles this year. In Brazil, DOF achieved a record 10.7% share in the first quarter, compared to 8.6% in the same period last year.

Preston Fite: In Brazil, <unk> achieved a record 10, 7% share in the first quarter compared to eight 6% in the same period last year.

Preston Fite: Doff trucks are highly desired by customers in South America, and the region is an important part of Packard's growth and success. In the third quarter of last year, PACCAR announced a commercial vehicle battery joint venture; construction of the 21 gigawatt hour factory located in Mississippi is expected to begin this quarter. PACCAR anticipates investing $600 to $900 million over the next several years in this factory to create cost-efficient commercial vehicle batteries. Packard's industry-leading trucks, expanding parts business, best-in-class financial services, and advanced technology strategy position the company well for an excellent future. Harry Skippers will now provide an update on truck deliveries, TACCAR parts, TACCAR financial services, and other business highlights.

Preston Fite: Dr trucks are highly desired by customers in South America, and the region is an important part of <unk> growth and success.

Preston Fite: In the third quarter of last year, <unk> announced a commercial vehicle battery joint venture.

Preston Fite: Construction of the 21 gigawatt hour factory located in Mississippi is expected to begin this quarter.

Preston Fite: <unk> anticipates investing $6 million to $900 million over the next several years in this factory to create cost efficient commercial vehicle batteries.

Preston Feight: PACCAR's industry-leading trucks, expanding parts business, best-in-class financial services, and advanced technology strategy position the company well for an excellent future. Harrie Schippers will now provide an update on truck deliveries, PACCAR Parts, PACCAR Financial Services, and other business highlights. Harrie?

PACCAR's industry-leading trucks, expanding parts business, best-in-class financial services, and advanced technology strategy position the company well for an excellent future. Harrie Schippers will now provide an update on truck deliveries, PACCAR Parts, PACCAR Financial Services, and other business highlights. Harrie?

Harry Skippers: <unk> industry, leading trucks expanding parts business best in class financial services and advanced technology strategy.

Harry Skippers: <unk> the company well for an excellent future.

Preston Fite: Harry Skippers will now provide an update on truck deliveries pack, our parts pack or financial services and other business highlights Gary.

Harrie Schippers: Thanks, Preston. PACCAR delivered 48,100 trucks during Q1 and anticipates Q2 deliveries to be around 48,000. PACCAR achieved excellent truck, parts, and other gross margins of 19% in Q1. We anticipate Q2 margins to be strong and in a range of 18% to 18.5%. PACCAR Parts had an outstanding Q1, with parts gross margins of 32.5%. We estimate parts sales to grow by 4% to 6% in Q2, following last year's record performance. PACCAR Parts' excellent long-term growth reflects the benefits of investments in transportation solutions that increase vehicle uptime and convenience for customers. PACCAR's aftermarket parts business provides strong profitability through all phases of the business cycle.

Harry Skippers: Thanks Preston.

Harry Skippers: Beck, our deliberate 48100 trucks during the first quarter.

Harry Skippers: Becker delivered 48,100 trucks during the first quarter and anticipates second quarter deliveries to be around 48,000. Packard achieved excellent truck parts and other gross margins of 19% in the first quarter. We anticipate second quarter margins to be strong and in a range of 18 to 18.5 percent. Pick a part from an outstanding first quarter, with parts gross margins of 32.5%. We estimate parts sales to grow by 4-6% in the second quarter, following last year's record performance.

Harry Skippers: And anticipates second quarter deliveries.

Harry Skippers: It would be around 48000.

Harry Skippers: Record achieved excellent truck parts and other gross margins of 19% in the first quarter.

Harry Skippers: We anticipate second quarter margins to be strong and in a range of 18 to 18, 5%.

Harry Skippers: <unk> had an outstanding first quarter.

Harry Skippers: With product gross margins of 32, 5%.

Harry Skippers: We estimate parts sales to grow by 4% to 6% in the second quarter following last years record performance.

Harry Skippers: Packer Parts' excellent long-term growth reflects the benefits of investments in transportation solutions that increase vehicle uptime and convenience for customers. Becker's aftermarket parts business provides strong profitability through all phases of the business cycle. Becker Parts has 19 parts distribution centers, or PDCs, worldwide and is expanding its global distribution network with the construction of a new PDC in Germany, which will open this year. Becker Financial Services benefited in the first quarter from excellent portfolio quality; pre-tax income was $114 million. U.S. truck prices have normalized.

Harry Skippers: Pekka prices excellent long term growth.

Harry Skippers: The benefits of investments in transportation solutions that increase vehicle uptime and convenience for customers.

Harry Skippers: That goes after market parts business provide strong profitability through all phases of the business cycle.

Harry Skippers: Pick up <unk> 19 plants distribution centers or Pdc's worldwide.

Harrie Schippers: PACCAR Parts has 19 parts distribution centers, or PDCs, worldwide, and is expanding its global distribution network with the construction of a new PDC in Germany, which will open this year. PACCAR Financial Services benefited in Q1 from excellent portfolio quality. Pre-tax income was $114 million. Used truck prices have normalized. With its larger portfolio and superb credit quality, PACCAR Financial is having another good year. PACCAR achieved an industry-leading return on invested capital of 28% in Q1. In 2024, we're planning capital investments in the range of $700 to 750 million dollars and R&D expenses in the range of $460 to 500 million as we continue to invest in key technology and innovation projects.

PACCAR Parts has 19 parts distribution centers, or PDCs, worldwide, and is expanding its global distribution network with the construction of a new PDC in Germany, which will open this year. PACCAR Financial Services benefited in Q1 from excellent portfolio quality. Pre-tax income was $114 million. Used truck prices have normalized. With its larger portfolio and superb credit quality, PACCAR Financial is having another good year. PACCAR achieved an industry-leading return on invested capital of 28% in Q1. In 2024, we're planning capital investments in the range of $700 to 750 million dollars and R&D expenses in the range of $460 to 500 million as we continue to invest in key technology and innovation projects.

Harry Skippers: And is expanding its global distribution network with the construction of a new PDC in Germany, which will open this year.

Harry Skippers: Victor financial services benefited in the first quarter from excellent portfolio quality.

Harry Skippers: Pretax income was $114 million.

Harry Skippers: Used truck prices have normalized.

Harry Skippers: With its larger portfolio and superb credit quality, Becker Financial is having another good year. It achieved an industry-leading return on invested capital of 28% in the first quarter. In 2024, we're planning capital investments in the range of $700 to $750 million and R&D expenses in the range of $460 to $500 million as we continue to invest in key technology and innovation projects. These include clean diesel combustion engines, battery and hydrogen electric powertrains, advanced driver assistance systems, and new connected vehicle services.

Harry Skippers: With its largest portfolio and superb credit quality back our financial is having another good year.

Harry Skippers: <unk> achieved an industry, leading return on invested capital of 28% in the first quarter.

Harry Skippers: In 2024, we are planning capital investments in the range of $700 million to $750 million.

Harry Skippers: R&D expenses in the range of 462 $500 million.

Harry Skippers: As we continue to invest in key technologies and innovation projects.

Harrie Schippers: These include clean diesel combustion engines, battery and hydrogen electric powertrains, advanced driver assistance systems, and new connected vehicle services. PACCAR is also investing in manufacturing capacity to support future growth, including expansions at Kenworth, Peterbilt, PACCAR Mexico, and at DAF in Brazil and Europe. We're also investing in a new PACCAR engine remanufacturing facility in Columbus, Mississippi, and in the new battery joint venture. We expect 2024 to be an excellent year. Thank you. We're pleased to answer your questions.

These include clean diesel combustion engines, battery and hydrogen electric powertrains, advanced driver assistance systems, and new connected vehicle services. PACCAR is also investing in manufacturing capacity to support future growth, including expansions at Kenworth, Peterbilt, PACCAR Mexico, and at DAF in Brazil and Europe. We're also investing in a new PACCAR engine remanufacturing facility in Columbus, Mississippi, and in the new battery joint venture. We expect 2024 to be an excellent year. Thank you. We're pleased to answer your questions.

Harry Skippers: These include clean diesel combustion engines.

Harry Skippers: Battery and hydrogen electric powertrains advanced driver assistant systems, and new connected vehicle services.

Harry Skippers: Packard is also investing in manufacturing capacity to support future growth, including expansions at Kenworth, Peterbilt, PECA Mexico, and at Dove in Brazil and Europe. We're also investing in a new Packard engine remanufacturing facility in Columbus, Mississippi, and in the new battery joint venture. We expect 2024 to be an excellent year. Thank you, but please answer your question.

Harry Skippers: Becker is also investing in manufacturing capacity to support future growth.

Harry Skippers: Including expansion at Kenworth Peterbilt.

Harry Skippers: Mexico, and <unk> in Brazil, and Europe.

Harry Skippers: We are also investing in a new pack, our engineering manufacturing facility in Columbus, Mississippi and into new battery joint venture.

Harry Skippers: We expect 2024 to be an excellent year.

Speaker Change: Thank you we're pleased to answer your questions.

Operator: Thank you. If you'd like to ask a question, you can press star followed by 1 on your telephone keypad. If you'd like to remove that question, you may press star followed by 2.

Speaker Change: Thank you.

Operator: Thank you. If you'd like to ask a question, you can press star followed by one on your telephone keypad. If you'd like to remove that question, you may press star followed by two. Please ensure you're unmuted locally when asking your question. Our first question for today comes from Tami Zakaria from J.P. Morgan. Your line is now open. Please go ahead.

Harry Skippers: To ask a question you can press star followed by one on your telephone keypad.

Operator: Terminate is that question you May press down led by two.

Operator: Please ensure you're unmuted locally when asking your question. Our first question for today comes from Tammy Zakaria from J.P. Morgan. Your line is now open. Please go ahead.

Speaker Change: <unk>, you're on mute lately when asking your question.

Tammy Zakaria: Our first question for today comes from Tami Zakaria from Jpmorgan your.

Tammy Zakaria: It is now open. Please go ahead.

Operator: Okay.

Tammy Zakaria: Hi, good morning. Thank you so much. So, my first question is on the deliveries for the second quarter for 48K around. Can you provide some color on how to think about deliveries by geography in the second quarter?

Tammy Zakaria: Hi, good morning, Thank you so much.

Tami Zakaria: Hi, good morning. Thank you so much. So my first question is on the deliveries for the second quarter, around 48,000. Can you provide some color on how to think about deliveries by geography in the second quarter?

Tammy Zakaria: So my first question is on the deliveries.

Tammy Zakaria: Sure.

Tammy Zakaria: Second quarter.

Tammy Zakaria: 48 key around can you provide some color on how.

Tammy Zakaria: Do you think about deliveries that geography in the second quarter.

Harrie Schippers: Harrie, you want to offer any comments?

Preston Feight: Harrie, you want to offer any comments?

Tammy Zakaria: Harry you want to offer any comments sure. Thanks Tommy.

Harry Skippers: Sure, I think it's time you did, the spread of the geographies will be very similar to the first quarter. I don't think we expect too many big changes. I think Europe, North America, and the rest of the world should be at similar levels, more or less, with some variation, of course.

Preston Feight: Sure, sure. I think, Tami, that the spread over the geographies will be very similar to the first quarter. I don't think we expect too many big changes. I think Europe, North America, and the rest of the world should be at similar levels, more or less. Some variation, of course, but pretty close.

Harrie Schippers: Sure, sure. I think, Tami, that the spread over the geographies will be very similar to the first quarter. I don't think we expect too many big changes. I think Europe, North America, and the rest of the world should be at similar levels, more or less. Some variation, of course, but pretty close.

Harry Skippers:

Harry Skippers: Spread over to geographies will be very similar to the first quarter I don't think we expect too many big changes I think.

Harry Skippers: Europe North America.

Harry Skippers: The rest of the world to be at similar levels more or less variation of course.

Speaker Change: That's pretty close.

Harry Skippers: Got it. So my follow-up question is, how's the dealer inventory looking in North America? The reason I ask is that it seems like your deliveries in North America were up almost 14% year over year in the first quarter, but some industry data vendors suggest that retail sales were down in the quarter. So can you, can you comment on the health of the inventory in the channel?

Tami Zakaria: Got it. So, my follow-up is, how's the dealer inventory looking like in North America? The reason I ask, seems like your deliveries in North America was up almost 14% year over year in Q1, but some industry data vendors suggest that retail sales were down in the quarter. So do you can you comment on, on the health of the inventory in the channel?

Speaker Change: Got it.

Harry Skippers: Follow up is.

Speaker Change: Good day.

Harry Skippers: Dealer inventory looking like in North America. The reason I ask is.

Harry Skippers: Thank you our deliveries in North America was up almost 14% year over year in the first quarter, but.

Harry Skippers: Some industry data vendors.

Harry Skippers: Retail sales were down in the quarter.

Harry Skippers: Can you comment on the health of the inventory in the channel.

Speaker Change: Sure happy to do that.

Harry Skippers: We're happy to do that. First of all, if you look at our inventory, it's really less than three months of inventory on the class eight side of it when the industry is a little bit higher than us. One of the things to think about when you consider PACCAR's inventories is a strong vocational market share. If you think about the fact that a vocational truck takes maybe six months longer to put into service, it means there's additional time.

Preston Feight: Sure, happy to do that. First of all, if you look at our inventory, it's really less than three months of inventory in the Class 8 side of it, when the industry is a little bit higher than us. One of the things to think about when you consider PACCAR's inventory is our strong vocational market share. If you think about the fact that a vocational truck takes maybe six months longer to put into service, it means there's additional time. So the stronger vocational market has a natural cadence to increasing inventory. But overall, our inventory is in very good shape, and our market share is increasing. So we saw market share growth from Q4 to Q1. We expect that we have the right mix of build and a healthy inventory. All feels pretty good.

Harry Skippers: First of all if you look at our inventory, it's really less than three months of inventory in the class eight side of it.

Harry Skippers: The industry is a little bit higher than us.

Harry Skippers: One of the things to think about when you consider Packers inventories are strong vocational market.

Harry Skippers: Sure and if you think about the fact that a vocational truck takes maybe six months longer to put into service. It means there is additional time, so the stronger vocational market has a natural cadence to increasing inventory, but overall our inventory is in very good shape and our market share is increasing so we saw market share growth from <unk> to <unk>, we expect that.

Harry Skippers: So the stronger vocational market has a natural cadence to increasing inventory. But overall, our inventory is in very good shape, and our market share is increasing. We saw market share growth from 4Q to 1Q. We expect that we have the right mix of build and a healthy inventory. All feels pretty good.

Harry Skippers: We have the right mix of build in a healthy inventory all feels pretty good.

Speaker Change: Wonderful thank you.

Tammy Zakaria: Wonderful, thank you.

Tami Zakaria: Wonderful. Thank you.

Speaker Change: You are quite welcome.

Preston Feight: You're quite welcome.

Operator: Thank you. Our next question comes from Angel Castillo of Morgan Stanley. Your line is now open, please go ahead.

Speaker Change: Thank you.

Operator: Thank you. Our next question comes from Angel Castillo of Morgan Stanley. Your line is now open. Please go ahead.

Tammy Zakaria: Question comes from the Angel Castillo of Morgan Stanley Your.

Angel Castillo: Your line is now open. Please go ahead.

Angel Castillo: Thanks for taking my question, and congrats on a strong quarter. Just wanted to go back to your comment, I guess, to the prior question, just in terms of the second quarter level of deliveries being similar to the first quarter, you know, very strong deliveries in North America. If we kind of assume similar deliveries in the second quarter, we're, you know, running ratings at quite positive rates, so just wanted to kind of then bridge that to, you know, the lowered guide for shipments for the full industry in North America.

Speaker Change: Alright, Thanks for taking my question and congrats on the strong quarter.

Harrie Schippers: Hi, thanks for taking my question, and congrats on the strong quarter. Just wanted to-

Angel Castillo: Hi, thanks for taking my question, and congrats on the strong quarter. Just wanted to-

Angel Castillo: Just wanted to go back to your comment.

Preston Feight: Thank you

Harrie Schippers: ... go back to your comment, I guess, to the prior question. I think just in terms of the Q2 level of deliveries being similar to Q1, you know, very strong deliveries in North America. If we kind of assume similar deliveries in Q2, we're, you know, run rating at a quite positive rate. So just wanted to kind of then bridge that to, you know, the lowered guide for shipments for the full industry for North America. Can you help us understand, you know, what is otherwise a very strong H1, inventories that seem to be kind of at a good level versus an industry view that seems to be a little bit more modest? Is it market share? Is it something specific to H2?

Angel Castillo: ... go back to your comment, I guess, to the prior question. I think just in terms of the Q2 level of deliveries being similar to Q1, you know, very strong deliveries in North America. If we kind of assume similar deliveries in Q2, we're, you know, run rating at a quite positive rate. So just wanted to kind of then bridge that to, you know, the lowered guide for shipments for the full industry for North America. Can you help us understand, you know, what is otherwise a very strong H1, inventories that seem to be kind of at a good level versus an industry view that seems to be a little bit more modest? Is it market share? Is it something specific to H2?

Angel Castillo: A question just in terms of the second quarter level of delivery as being similar to the first quarter.

Angel Castillo: Very strong deliveries in North America, if we kind of assume similar deliveries in the second quarter.

Angel Castillo: Run rating at a quite positive rates. So just wanted to kind of enbridge that too.

Angel Castillo: A lower guide for shipments for the full industry for North America. So can you help us understand.

Angel Castillo: So, can you help us understand what is otherwise a very strong first half inventory that seems to be kind of at a good level versus an industry view that seems to be a little bit more modest? Is it market share? Is it something specific to the second half? Just, again, help us bridge that and understand the change. Yeah, sure.

Angel Castillo: What is otherwise a very strong first half inventories that seem to be kind of at a good level versus an industry view that seems to be quite a bit more modest.

Angel Castillo: Market share is it something specific to the second half just again help us bridge that and understand that the change.

Harrie Schippers: Just, again, help us bridge that and understand the change.

Just, again, help us bridge that and understand the change.

Preston Fite: Yeah, sure. Happy to delve into that.

Preston Feight: Yeah, sure. Happy to, happy to delve into that. First of all, the adjustment is, is a small adjustment, and a midpoint of 270 we think is a great market in North America... but also I think what you're seeing we're reflecting as PACCAR, is that we're continuing to demonstrate that our business is structurally stronger, that the margins are higher, that our market share is increasing in the US and Canada, both in heavy duty and medium duty. So we feel good about the way the market's going for PACCAR, which is, obviously, a place we know the most about, and we feel very good about it.

Speaker Change: Yes, sure happy to happy to delve in that first of all the adjustment is is a small adjustment.

Preston Fite: First of all, the adjustment is a small adjustment, and a midpoint of 270 is what we think is a great market in North America. But also, I think what you're seeing is what we're reflecting as PACCAR is that we're continuing to demonstrate that our business is structurally stronger, that the margins are higher, and that our market share is increasing in the U.S. and Canada, both in heavy duty and medium duty. And so we feel good about the way the market's going for PACCAR, which is obviously a place we know the most about, and we feel very good about it.

Preston Fite: Our midpoint of 270, we think is a great market in North America.

Preston Fite: But also I think what youre seeing were reflecting as Pac car as it were.

Preston Fite: Continuing to demonstrate that our business is structurally stronger that the margins are higher than our market shares increasing in the U S and Canada, both in heavy duty and medium duty and so we feel good about the way the market is going for <unk>.

Preston Fite: Obviously, a place we know the most about and and we feel very good about it.

Preston Fite: Maybe just from a broader industry perspective was there anything in particular that kind of triggered the modest change.

Stephen Volkmann: Maybe just from a broader industry perspective, was there anything in particular that kind of triggered the modest change?

Angel Castillo: Maybe just from a broader industry perspective, was there anything in particular that kind of triggered this modest change? Yeah, I think so.

Angel Castillo: Maybe just from a broader industry perspective, was there anything in particular that kind of triggered the modest change?

Speaker Change: Yes, I think so if we look at it and you said, we already mentioned the strong vocational market and the strong <unk> market and our comments and we do see the truckload segment.

Preston Feight: Yeah, I think so. If we look at it, and you said we, we already mentioned the strong vocational market and the strong LTL market in our comments, and we do see the truckload segment having continued softness, and you heard that in some of the public companies calls. We think that's balanced against the fact that at some point, they want to stay on their cadence of buying, and that cadence is going to need to continue. So that's why we think the market's good for 2024. And then we would expect 2025 and 2026 to start to look even more positive as we head into the 2027 emission cycle.

Preston Fite: Yeah, I think so. If we look at it, and you said we already mentioned the strong vocational market and the strong LTL market in our comments, and we do see the truckload segment having continued softness, and you heard that from some of the public companies. We think that's balanced against the fact that, at some point, they want to stay on their cadence of buying, and that cadence is going to need to continue. So that's why we think the market's good for 2024. And then we would expect 2025 and 2026 to start to look even more positive as we head into the 2027 emissions cycle.

Preston Fite: Having continued softness and you heard that in some of the public companies.

Preston Fite: We think that's balanced against the fact that at some point they want to stay on their cadence of buying and that cadence is going to need to continue. So that's why we think the market is good.

Preston Fite: For 2024, and then we would expect 25 and 26 to start to look even more positive as we head into the 2027 emission cycle.

Speaker Change: That's helpful. Thank you and then just lastly on just on the order books could you just help us just remind us where you're at in terms of kind of <unk> order book fell <unk> <unk> and <unk>.

Stephen Volkmann: That's helpful. Thank you. And then just lastly, on just on the order books, could you just help us, or just remind us where you're at in terms of kind of Q2 order book fill rate, Q3, and Q4? At least industry data, it seemed like Q2 and Q3 are pretty full. Just help us understand the cadence of what kind of those rates are at now.

Angel Castillo: That's helpful. Thank you. And then just lastly, on just on the order books, could you just help us, or just remind us where you're at in terms of kind of Q2 order book fill rate, Q3, and Q4? At least industry data, it seemed like Q2 and Q3 are pretty full. Just help us understand the cadence of what kind of those rates are at now.

Preston Fite: And then just lastly, on just the order books, could you just help us or just remind us where you are in terms of kind of 2Q order book fill rate, 3Q, and 4Q? At least, based on industry data, it seems like 2Q and 3Q are pretty full. Just help us understand the cadence of what kind of those rates are at now. Yeah, we have good fill in the second quarter.

Preston Fite: Dana it seemed like chicken and take you have a pretty full.

Preston Fite: Understand the cadence of what kind of those rates right now.

Preston Fite: Yes, we have good fill in the second quarter substantially full through our markets and filling nicely into the third quarter now.

Preston Feight: Yeah, we have good fill in Q2, substantially full through all markets, and filling nicely into Q3 now.

Preston Fite: Yeah, we had good fill in the second quarter, substantially full through all markets, and filling nicely into the third quarter now. Yeah, great. Have a good day.

Stephen Volkmann: Helpful. Thank you.

Angel Castillo: Helpful. Thank you.

Speaker Change: Helpful. Thank you.

Preston Feight: Yeah, great. Have a good day.

Speaker Change: Okay, great have a good day.

Preston Fite: Okay.

Preston Fite: Yeah.

Operator: Thank you. Our next question comes from Rob Wertheimer of Mellius Research. Your line is now open. Please go ahead.

Operator: Thank you. Our next question comes from Rob Wertheimer of Melius Research. Your line is now open. Please go ahead.

Speaker Change: Thank you next.

Preston Fite: Next question comes from Robert Wertheimer of Melius research.

Rob Wertheimer: Your line is now open. Please go ahead.

Rob Wertheimer: Thank you. Had a question just on the interest rate sensitivity, where, you know, I guess historically, trucks have been perceived to be, you know, a market that you can stimulate or not with, rising lower rates from the Fed. Are you seeing that as, you know, as rates have risen, has that been a major factor in either new or used purchases? To your earlier comments, Preston, it seems like vocational is a great setup right now. Is that less sensitive to the vagaries of interest rates just because of, you know, mega project demand, infrastructure or older fleets? Just maybe any comments you have on that risk. Thank you.

Rob Wertheimer: Thank you.

Rob Wertheimer: Thank you. I had a question just on interest rate sensitivity where, you know, I guess historically, trucks have been perceived to be a market that you can stimulate or not with rising lower rates in the Fed. And are you seeing that as rates have risen, has that been a major factor in either new or used purchases? And to your earlier comments, Preston, it seems like vocational training is a great setup right now. Is that less sensitive to vagaries of interest rates just because of, you know, megaproject demand infrastructure or older fleets? So, just maybe, any comments you have on that risk. Thanks.

Rob Wertheimer: I had a question just on the interest rate sensitivity, where I guess historically trucks have been perceived to be a market that you can stimulate or not with.

Rob Wertheimer: Rising lower.

Rob Wertheimer: Rates from the fed and are you seeing that.

Rob Wertheimer: Rates have risen there has that been a major factor in either new or used purchases and to your earlier comments president. It seems like vocational is a great set up right now is that less sensitive to the vagaries of interest rates, just because of megaproject demand infrastructure or older fleets. So just maybe any comments you have on that rich. Thank you.

Harrie Schippers: Yeah, Rob, starting on the interest rate. So higher interest rates, of course, make trucks more expensive to lease for many of our customers, so it does have some impact there. But please also bear in mind that customers are buying a new truck today, they replace a three or four-year-old truck, and that new truck comes with significant better fuel efficiency, somewhere in the 7% to 12% range. So that offsets some of those higher interest rate payments. But of course, you're right, our customers would like lower interest rates. They always do.

Harry Skippers: Rob, starting on interest rates, higher interest rates, of course, make trucks more expensive to lease for many of our customers, so it does have some impact there, but please also bear in mind that customers are buying new trucks today; they replace a three or four-year-old truck, and that new truck comes with significantly better fuel efficiency, somewhere in the 7% to 12% range, so that offsets some of those higher interest rate payments. Of course, you're right, our customers would like lower interest rates; they always do, but as a percentage of their...

Rob Wertheimer: Starting on the interest rate higher interest rates of course make make drugs more expensive to lease for many of our customers. So it does have some impact there but.

Harry Skippers: Please also bear in mind that customers are borrowing the new truck today.

Harry Skippers: If he plays a three or four year old truck and that New York neutral comes with significant better fuel efficiency somewhere in the 7% to 12% range. So that offsets some of those higher interest payments.

Harry Skippers: Payments, but of course it Chris.

Harry Skippers: We like lower interest rates they always do.

Preston Feight: But as a percentage of their total, just to add on to what Harrie is saying, as a percentage of the total business for them, it's not that significant. And I think we also look at it and say, like, interest rates are in pretty normal levels from a long-term history standpoint. So, with the economy moving along nicely, with economic growth expected, we think it should be a good year.

Harry Skippers: But as a percentage of their total just to add on with <unk> as a percentage of the total business for them, it's not that significant and I think we also look at it and say like interest rates are in pretty normal levels from a long term history standpoint. So.

Preston Fite: But as a percentage of their total, just to add to what Harry's saying, as a percentage of their total business for them, it's not that significant. And I think we also look at it and say, like, interest rates are at pretty normal levels from a long-term historical standpoint. So with the economy moving along nicely, with economic growth expected, we think it should be a good year.

Preston Fite: With the economy, moving along nicely with economic growth expected, we think it should be a good year.

Rob Wertheimer: Perfect. And then is vocational a different market? And I wonder if you could just comment on, you mentioned it's stronger; it seems obvious it's stronger, just any comment on the bifurcation between that and the long haul segment, how big that is, or how wide.

Rob Wertheimer: Perfect and then as vocational and different market and I Wonder if you could just comment on you mentioned the stronger it seems obviously stronger.

Rob Wertheimer: Perfect. Then is vocational a different market? I wonder if you could just comment on, you, you mentioned it's stronger, it seems obvious it's stronger. Just any comment on the bifurcation between that and the long-haul segment, how big that is or how wide that is? If it is more resilient, given the infrastructure stuff.

Rob Wertheimer: Just any comment on the bifurcation between that and the long haul segment, how big that is or how why that is.

Preston Fite: If it is more resilient given the... Sure. A great, great, great topic for us. I mean, think about it. We have over 40.

Preston Fite: Yes, you can is more resilient given the infrastructure stuff.

Preston Fite: Sure Great great great topic for us when you think about it we have over 40% share in the vocational market between kenworth and peterbilt.

Preston Fite: Sure. A great, great, great topic for us. And if you think about it, we have over 40% of the vocational market between Kenworth and Peterbilt. It's, I mean, this is not a perfect number, but it's roughly 25% of the total market. Obviously, it varies plus or minus, and it's exceptionally strong right now. Backlog is effectively full for that market for much of the year. We're kind of stacked up at the bodybuilders, so that bodes well for Kenworth and Peterbilt for the balance of the year and going forward. And we think just as you look at the infrastructure spending in the country, that's continuing to happen, and it's going to continue to be strong for us.

Preston Feight: Sure. Great, great, great topic for us. When you think about it, we have over 40% share in the vocational market between Kenworth and Peterbilt. It's, I mean, this is not a perfect number, but it's roughly 25% of the total market. Obviously, it varies ±, and it's exceptionally strong right now. Backlog is effectively full for that market through much of the year. We're kind of stacked up at bodybuilders, so that bodes well for Kenworth and Peterbilt for the balance of the year and going forward. We think just as you look at the infrastructure spending in the country, and that's continuing to happen, and it's gonna continue to be strong for us.

Preston Fite: I mean, this is not a perfect number, but it's roughly 25% of the total market, obviously, it varies plus or minus and is exceptionally strong right now.

Preston Fite: Backlog is effectively full for that market through much of the year.

Preston Fite: We're kind of stacked up with bodybuilders, so that bodes well for kenworth and peterbilt for the balance of the year and going forward and we think just as you look at the infrastructure spending in the country and Thats continuing to happen and it's going to continue to be strong for us.

Speaker Change: Okay. Thank you.

Rob Wertheimer: Okay, thank you.

Speaker Change: You bet.

Operator: Thank you. Our next question comes from Steve Volkman of Geoffreys. Your line is now open. Please go ahead.

Preston Feight: You bet.

Operator: Okay.

Steve Volkman: Thank you.

Operator: Thank you. Our next question comes from Stephen Volkmann of Jefferies. Your line is now open. Please go ahead.

Steve Volkman: Next question comes from Steve Volkmann of Jeffries.

Steve Volkman: Your line is now open. Please go ahead.

Steve Volkman: Good morning, guys. Thanks for taking the question.

Stephen Volkmann: Good morning, guys. Thanks for taking the question. I guess we'll get more detail in the queue, but can you just comment on how pricing is looking these days?

Steve Volkman: Good morning, guys. Thanks for taking the question. I guess we'll get more detail in the queue, but can you just comment on how pricing is looking these days? Do you want to share anything on price?

Steve Volkman: We will get more detail in the Q, but can you just comment on how pricing is looking these days.

Preston Feight: Brice, you want to share anything on price?

Speaker Change: Sure Nathan.

Steve Volkman: Price, yes pricing is approximately 3% higher and thats very much in line with costs Steven.

Bryce Poposky: Bryce, do you want to share anything?

Brice Poplawski: Yeah. Our pricing is approximately 3% higher, and that's very much in line with costs, Steven.

Steve Volkman: Got it. Thank you for that.

Bryce Poposky: Yes.

Speaker Change: Got it. Thank you for that and then I'm curious Preston I think you said that.

Stephen Volkmann: Got it. Thank you for that. Then I'm curious, Preston. I think you said that you thought 2025 and 2026 would be improved, or I think more positive, I wrote down here. Are you thinking that we will start to see some pre-buy as early as 2025? I know there's a very big price increase coming here. Just your thoughts about how that plays out.

Preston Fite: And then I'm curious, Preston, I think you said that 25 and 26 would be improved, or, to put it more positively, I wrote down here. Are you thinking that we will start to see some pre-buy as early as 25? I know there's a very big price increase coming here. Just your thoughts about how that plays out.

Preston Fite: 25% and 26 would be improved or I think more positive I wrote down here.

Preston Fite: Thinking that we will start to see some pre buy as early as 25, I know theres, a very big price increase coming here just your thoughts about how that plays out.

Preston Fite: Yes, I do I think obviously the futures an unknowable only caveat is that for you, but I would say that when you look at the buying cycle and trucks are being run.

Preston Feight: Yeah, I do. I think obviously the future is an unknowable, so I caveat that for you. But I would say that when you look at the buying cycle and trucks are being run, and the fact that people are sensitive to those emissions changes, that it should help 2025 and 2026 be very strong years for the industry. And I think the question that everybody's kind of trying to figure out is: When will that start, and how significant will that initiation point begin? So for right now, what we look at is the trucks we're producing are the best trucks we've ever built. They have great efficiency, and they're not only great new trucks, but they're also great used trucks in a few years. So between that spot, the 2025 and 2026, strengthening market, I think all feels really good.

Preston Fite: Yeah, I do. I think, obviously, the future is unknowable, so I'll caveat that for you. But I would say that when you look at the buying cycle and how trucks are being run, and the fact that people are sensitive to those emissions changes, that it should help 25 and 26 be very strong years for the industry. And I think the question that everybody's kind of trying to figure out is when will that start and how significant will that initiation point be.

Preston Fite: And the fact that people are sensitive to those emissions changes that it should help 25 and 26 B very strong years for the industry and I think the question that everybody is kind of trying to figure out is when will that start and how significant will that initiation point begin.

Preston Fite: So for right now, what we look at is the trucks we're producing are the best trucks we've ever built. They have great efficiency. And they're not only great new trucks, but they'll also be great used trucks in a few years. So between that spot, the 25 and 26, strengthening market, I think, all feels really good.

Preston Fite: So for right now what we look at is the trucks were producing the best trucks, we've ever built they.

Preston Fite: They have great efficiency and they are not only great new trucks, but they're also great used trucks in a few years so between that spot the 25 and 26 strengthening market I think all feels really good.

Chad Dillard: ... Great. Thank you, guys.

Stephen Volkmann: ... Great. Thank you, guys.

Speaker Change: Great. Thank you guys.

Steve Volkman: Great. Thank you.

Preston Feight: Yeah, you bet. Have a good day.

Speaker Change: Yeah, you bet have a good day.

Operator: Thank you. Our next question is from Jamie Cook of TROIS. Jamie, your line is now open. Please go ahead.

Speaker Change: Thank you our next.

Operator: Thank you. Our next question is from Jamie Cook of Truist. Jamie, your line is now open. Please go ahead.

Steve Volkman: Next question is from Jamie Cook of Trust Jamie. Your line is now open. Please go ahead.

Jamie Cook: Hi, Good afternoon, and a nice quarter. Just on the answer to Steve's question, the 3% price that you said was in line with cost, was that, can you, I guess, distinguish between truck OE, you know, and aftermarket, and then, I guess, any commentary on pricing in the remaining three quarters? I'm just curious, like your truck deliveries in the second quarter are similar to the first, but margins are expected to be lower in the second quarter versus the first quarter. Any color on that?

Jamie Cook: Hi, good afternoon nice quarter, just on the answer to Steve's question. The 3% price that you said was in line with cost with that can you I guess distinguish between truck OE.

Jamie Cook: Hi. Hi, good afternoon, and nice quarter. Just on the answer to Steve's question, the 3% price that you said was in line with cost, was that, can you, I guess, distinguish between truck OE, you know, and aftermarket? And then I guess, any commentary, you know, on pricing in the remaining three quarters. I'm just curious, like, your truck deliveries in the second quarter are similar to the first, but margins are expected to be lower in the second quarter versus the first quarter. So, any color on that? And then I guess follow up, Preston. Obviously, margins have been, you know, very strong as we're going through the cycle and demand is, you know, starting to, I guess, moderate.

Jamie Cook: In aftermarket.

Jamie Cook: And then I guess any commentary on pricing and the remaining three quarters I'm just curious like your truck deliveries in the second quarter are similar to the first but margins are expected to be lower in the second quarter versus the first quarter. So.

Speaker Change: Any color on that and then I guess follow up Preston, obviously margins have been very strong as we're going through the cycle and demand is.

Jamie Cook: And then, I guess, follow-up, Preston, obviously, margins have been, you know, very strong as we're going through the cycle, and demand is, you know, starting to, I guess, moderate. Any view on structurally how much you think your margins have improved, you know, versus potentially having to give stuff back on price, you know, just related to the market share and the new truck introductions? I was just wondering how you're structurally thinking about margin improvement this cycle. Thank you. You bet, James. There's a lot of questions in there, but thanks. It's good to hear from you.

Preston Fite: Starting to I guess moderate any view on structurally how much you think your margins have improved versus potentially havent give step back on and price.

Jamie Cook: Any view on structurally how much you think your margins have improved, you know, versus potentially having to give stuff back on price, you know, just the related to the, you know, the market share and the new truck introductions? Just wondering how you're structurally thinking about margin improvement this cycle. Thank you.

Any view on structurally how much you think your margins have improved, you know, versus potentially having to give stuff back on price, you know, just the related to the, you know, the market share and the new truck introductions? Just wondering how you're structurally thinking about margin improvement this cycle. Thank you.

Speaker Change: Related to that the market share and then your truck.

Jamie Cook: Production, just wondering how youre structurally thinking about margin improvement the cycle. Thank you.

Preston Fite: Hey, you bet, Jamie there's a lot of questions in there, but thanks. Thanks that's.

Preston Feight: Yeah, you bet, Jamie. There's a lot of questions in there, but thanks, thanks. It's good to hear you. So I'd say to start with the, on the truck side, the price versus cost is three and, three and three.

Preston Fite: Yeah, you bet, James. There's a lot of questions in there, but thanks. It's good to hear from you.

Speaker Change: Good to hear you.

Preston Fite: So I would say to start with on the truck side the price versus cost is three three and three and on the parts side prices three and cautious too. So that kind of helps you there kind of expect something maybe in a similar range as going forward through the course of the year.

Preston Fite: So, I'd say to start with, on the truck side, the price versus cost is three and three, and on the parts side, price is three, and cost is two. So, that kind of helps you there kind of expect something maybe in a similar range going forward through the course of the year. That all, of course, leads into your questions on margin, and I look at the margins.

Jamie Cook: Mm-hmm.

Preston Feight: On the parts side, price is three and cost is two.

Jamie Cook: Yeah.

Preston Feight: So that kind of helps you there. Kind of expect something maybe in the similar ranges going forward through the course of the year. That all, of course, leads into your questions on margin, and I look at the margins. One of the things we're really proud of our people at PACCAR are creating these great trucks, these great parts business systems, because it is delivering these structurally stronger margins, for everyone. Really happy with how that's going. The fact that we delivered a 19% margin in a time when there's a truckload carriers are a bit softer, feels really positive. And the fact that we shared with you that Q2 looks like 18% to 18.5%, really strong margins for the company, which is showing that we can demonstrate excellent performance through all cy- all parts of the business cycle.

Preston Fite: That all of course leads into your questions on margin and I look at the margins one of the things that we're really proud of our people at <unk> are creating these great trucks, he's great parts business systems, because it is delivering these structurally stronger margins for everyone.

Preston Fite: One of the things that we're really proud of our people at PACCAR is creating these great trucks, these great parts business systems, because it is delivering structurally stronger margins for everyone. Really happy with how that's going. The fact that we delivered a 19% margin in a time when truckload carriers are a bit softer feels really positive, and the fact that we shared with you that second quarter looks like 18% and 18.5%, really strong margins for the company, which is showing that we can demonstrate excellent performance through all parts of the business cycle. Really pleased with the team for what they're doing.

Preston Fite: Really happy with how Thats going the fact that we delivered a 19% margin in a time when there is a truckload carriers are a bit softer.

Preston Fite: It was really positive and the fact that we shared with you that second quarter. It looks like 80%, 85% really strong margins for the company, which is showing that we can demonstrate excellent performance through all site all parts of the business cycle really pleased with the team for what they're doing.

Preston Feight: Really pleased with the team for what they're doing.

Preston Fite: Okay.

Jamie Cook: Thank you.

Speaker Change: Thank you.

Speaker Change: You bet.

Preston Feight: You bet.

Operator: Thank you. Our next question comes from Chad Dillard of Bernstein. Your line is now open, please go ahead.

Operator: Thank you. Our next question comes from Chad Dillard from Bernstein. Your line is now open. Please go ahead.

Speaker Change: Thank you next.

Preston Fite: Next question comes from Chad Dillard from Bernstein.

Chad Dillard: Your line is now open. Please go ahead.

Chad Dillard: Hi, good morning guys. Hey, morning.

Chad Dillard: Hi, good morning, guys.

Chad Dillard: Hey, good morning.

Preston Feight: Good morning.

Chad Dillard: So I was hoping to get your thoughts on the shape of this cycle. I think, Preston, you mentioned that 25 to 26 would be a better year versus 24. Just want to get a sense for whether you're seeing a bottom in orders, what gives you that confidence? And then do you think capacity needs to leave the market before you see an order rebound?

Chad Dillard: So I was hoping to get your thoughts on the shape of the cycle. I think you mentioned that 25% to 26 would be better year versus 24.

Chad Dillard: So I was hoping to get your thoughts on the shape of the cycle. I think, Preston, you mentioned that 2025 and 2026 would be a, a better year versus 2024. Just want to get a sense for whether you're, you know, seeing a bottom in orders, like, what gives you that confidence? And then do you think capacity needs to lead the market before you see an order rebound?

Chad Dillard: I just wanted to get a sense for whether you're seeing a bottom and orders like what gives you that confidence.

Chad Dillard: And then do you think capacity in the market before you see an order rebound.

Preston Fite: Well I think that.

Preston Feight: Well, I, I think that right now, if I, if I get with you, Chad, it's that what we're seeing is truckload sector people want to keep buying trucks. They, they're concerned about getting aged inventory. They want to stay on buying cycle. I think that there is capacity out there, obviously. And it's a very normal cycle is what it feels like right now, a healthy, normal cycle. And their question is, when does this thing turn, and when do they need to make sure that they're continuing to get their orders placed? So the conversations are their interest in the future, and what's that going to look like? Is it three months from now, six months from now, a year from now, that they need to make sure they've, they have acquired the capital, the trucks that they need.

Preston Fite: Right now, if I go with you, Chad, what we're seeing is that in the truckload sector, people want to keep buying trucks. They're concerned about getting aged inventory. They want to stay on the buying cycle. I think that there is capacity out there, obviously. It's a very normal cycle is what it feels like right now, a healthy normal cycle.

Preston Fite: Right now if I, if I get with each added as it were.

Preston Fite: We're seeing as truckload sector people want to keep buying trucks.

Preston Fite: <unk> about getting aged inventory they want to stay on buying cycle I think that there is capacity out there obviously.

Preston Fite: It's a very normal cycles, what it feels like right now healthy normal cycle and third question is when does this thing turn and when do they need to make sure that they're continuing to get their orders placed so the conversations are their interest in the future and what's that going to look like is it three months from now six months from now a year from now that they need to make sure. They are they have.

Preston Fite: And their question is, when does this thing turn around, and when do they need to make sure that they're continuing to get their orders placed? So the conversations are about their interest in the future and what it's gonna look like. Is it three months from now, six months from now, a year from now that they need to make sure they have, acquire the capital, the trucks that they need.

Preston Fite: Wired the capital the trucks that they need.

Chad Dillard: Got it. That's helpful. And then just, I'd like to get a little bit of color on your product strategy as you're pushing the pre-buy. I know you guys did a pretty good job when there was a regulatory change and introducing some new products that are real-time with that. Any color on how you're thinking about, like, the next couple of years on that?

Speaker Change: Got it Thats helpful.

Chad Dillard: Got it. That's helpful. And then just, I'd like to get a little bit of color on your product strategy as you're approaching the pre-buy. I know you guys did a pretty good job in Europe when there was a regulation change and introduced some new products that had a little time with that. Just any color on how you're thinking about, like, the next couple of years on that?

Chad Dillard: And then just I'd like to give a color on your your product strategy as your question of the pre buy.

Chad Dillard: And then you guys did a pretty good job.

Chad Dillard: In Europe, when there is a regulation change and introducing some new products that are real time with that.

Chad Dillard: Just any color on how youre thinking about the next couple of years on that.

Chad Dillard: On our product strategy.

Preston Fite: on our product strategy. Let's share, first of all, again, a shout out to the team for what they've accomplished. There are a couple things I'd like to mention about that.

Preston Feight: On our product strategy? Let's share-

Speaker Change: Sure first of all again, a shout out to the team what they've accomplished there are a couple of things I'd like to mentioned in that one is from a product strategy standpoint, we just introduced the new model 589 at Peterbilt in January which is a fantastic new truck and iconic truck is doing really well in the market. So it's just part of our continued rollout of new products.

Chad Dillard: Right.

Preston Feight: First of all, again, a shout-out to the team, what they've accomplished. I, there's a couple of things I'd like to mention on that. One is from a product strategy standpoint, we just introduced the new Model 589 at Peterbilt in January, which is just a fantastic new truck, an iconic truck. It's doing really well in the market, so it's just part of our continued rollout of new products. The new medium-duty products in North America are doing exceptionally well. We see the market share continuing to grow. End of last year, we were at 14.5%, gone to 17% in medium duty, with really strong margin performance.

Preston Fite: One is from a product strategy standpoint; we just introduced the new Model 589 at Peterbilt in January, which is a fantastic new truck, an iconic truck. It's doing really well in the market, so it's just part of our continued rollout of new products. The new medium-duty products in North America are doing exceptionally well, and we see market share continuing to grow. At the end of last year, we were at 14.5 percent, and we had gone to 17 percent in medium-duty with really strong margin performance.

Preston Fite: Medium duty products in North America are doing exceptionally well, we see the market share continuing to grow and of last year were at 14, 5% gone to 17% in medium duty with really strong margin performance and then if I think of more broadly about strategies of product introductions, we're continuing to develop new trucks, new engines, new alternative energy capability.

Preston Fite: And then if I think more broadly about strategies for product introductions, we're continuing to develop new trucks, new engines, new alternative energy capability so that we have a very capable powertrain portfolio to handle the emissions changes that are coming forward and the uncertainty, frankly, that the industry will experience with regulations. So it feels like Packard's very well positioned to handle anything that comes forward at us. And if I may add to that, Preston, that the 2027.

Preston Feight: And then if I think more broadly about strategies of product introductions, we're continuing to develop new trucks, new engines, new alternative energy capability, so that we have a very capable powertrain portfolio to handle the emissions changes that are coming forward and the uncertainty, frankly, that the industry will experience with regulations. So it feels like PACCAR is very well positioned to handle anything that comes forward at us.

And then if I think more broadly about strategies of product introductions, we're continuing to develop new trucks, new engines, new alternative energy capability, so that we have a very capable powertrain portfolio to handle the emissions changes that are coming forward and the uncertainty, frankly, that the industry will experience with regulations. So it feels like PACCAR is very well positioned to handle anything that comes forward at us.

Preston Fite: So that we have a very capable.

Preston Fite: Capable powertrain portfolio to handle the emissions changes that are coming forward in the uncertainty frankly that the industry will experience with regulations. So it feels like Packer is very well positioned to handle anything that comes forward at us.

Harrie Schippers: And if I may add there, Preston, that the 2027 emissions that we will see nationwide, what CARB is doing this year is already very similar in 2024, and we will launch a PACCAR engine in California that meets their requirements this year. So we'll know exactly which technology to apply there.

Speaker Change: And if I may add third Princeton.

Preston Fite: The 2027 emissions that we will see.

Harry Skippers: And if I may add there, Preston, that the 2027 emissions that we will see nationwide, what CARP is doing this year, is already very similar in 2024, and we will launch a packer engine in California that meets their requirements this year. So we'll get, we'll know exactly which technology to apply there.

Harry Skippers: Nationwide, but.

Harry Skippers: Copper is doing this year is already very similar in 2024, and we will launch APAC arrangement in California that meets their requirements. This year.

Harry Skippers: So we will get we'll know exactly which technology to apply there.

Harry Skippers: Yes.

Speaker Change: Thank you.

Chad Dillard: Thank you.

Preston Feight: You bet. Have a good day.

Speaker Change: You bet have a good day.

Harry Skippers: Okay.

Operator: Thank you. Our next question comes from David Rasso from Evercore ISI. David, your line is now open. Please go ahead.

Speaker Change: Thank you.

Harry Skippers: Our next question comes from David Raso from Evercore ISI.

David Rasso: David Your line is now open. Please go ahead.

David Rasso: Hi, thank you for your time. I'm curious about Europe.

David Rasso: Hi, Thank you for the time I am curious about Europe.

David Raso: Hi. Thank you for the time. I'm curious about Europe. The deliveries for the first half of the year, it looks like you're planning to be down around 31%, and the market guide, your mid-point's down 18%. You didn't change the guide for the industry. Just wanted to get your thoughts on, is that level of delivery clearing out inventory? Or just trying to understand your considerations of lowering the European industry guide when you're going through these numbers? Just trying to get a sense of how you view that market the rest of the year.

Preston Fite: The deliveries for the first half of the year, it looks like you're planning to be down around 31 percent, and the market guide, your midpoint's down 18. You didn't change the guide for the industry. Just wanted to get your thoughts on, is that level of delivery clearing out inventory, or just trying to understand your considerations of lowering the European Industry Guide when you're going to these numbers to try to get a sense of how you do that market the rest.

David Rasso: The deliveries for the first half of the year and it looks like you're planning to be down around 31% and the market guide Youre mid points down 18.

Preston Fite: You didn't change the guide for the industry just wanted to get your thoughts on.

Preston Fite: Is that level of delivery clearing out inventory or just trying to understand.

Preston Fite: Your considerations of lowering the European industry guide when you're going through these numbers just trying to get a sense of how you view that market the rest of the year.

Speaker Change: Yes, I think I'll start and Harry can add whatever you'd like twos I would say that the European truck market has seen softening and that's especially true in central and Eastern Europe, which are strong markets for <unk>. So we've seen those delivery numbers adjust appropriately around that and we have to build.

Preston Fite: Yeah I think I'll start and Harry can add whatever he'd like to is I would say that the European truck market has seen softening and that's especially true in Central and Eastern Europe which are strong markets for DOF so we've seen those delivery numbers adjust appropriately around that and we have the build dialed into the delivery schedules so we think that the new DOF truck continues to deliver for PAC our great margin performance which is a pretty important thing for us with this new product is delivering great fuel economy for our customers and so I think that you're just seeing the cadence of the market down and we would expect to see that probably continue throughout the year Anything you'd add, Harry? also coming off a record quarter in last year.

Preston Feight: Yeah, I think I'll start, and Harrie can add whatever he'd like to. I would say that the European truck market has seen softening, and that's especially true in Central and Eastern Europe, which are strong markets for DAF. So we've seen those delivery numbers adjust appropriately around that, and we have the build dialed into the delivery schedule. So we think that the new DAF truck continues to deliver for PACCAR great margin performance, which is a pretty important thing for us with this new product. It's delivering great fuel economy for our customers. And so I think that you're just seeing the cadence of the market down, and we would expect to see that probably continue throughout the year. Anything you'd add, Harrie?

Harry Skippers: <unk> into the delivery schedule. So we think that the new Dr. Chuck continues to deliver for Pac are great margin performance.

Harry Skippers: So a pretty important thing for us with this new product is delivering great fuel economy for our customers.

Harry Skippers: And so I think youre, just seeing the cadence of the market down and we would expect to see that probably continue throughout the year.

Harry Skippers: Anything you'd add Harry.

Harrie Schippers: No, we're also coming off a record quarter in last year. Q1 2023 was record quarter for DAF in Europe, and so a lot of that, what Preston's talking about, the fuel economy benefits and the great performance of the new truck. So, yeah, the comps are getting a little bit more difficult too there.

Harry Skippers: We're coming off of.

Harry Skippers: We're also coming off a record quarter and.

Preston Fite: The first quarter of 2023 was a record quarter for DAF in Europe, and I saw a lot of what Preston is talking about, the fuel economy benefits and the great performance of the new truck. So the comps are getting a little bit better.

Harry Skippers: Last year first quarter of 2023.

Harry Skippers: A record quarter for <unk> in Europe.

Harry Skippers: So a lot of the press is talking about the fuel economy benefits and the great performance of the new truck.

Preston Fite: So.

Harry Skippers: Comps are getting a little bit more difficult to there.

Harry Skippers: Yes, I mean, the cap the <unk>.

David Rasso: Yeah, I mean, the comp does ease in the second half. I'm just trying to get a sense of, should we expect delivery? that far below your industry outlook for most of the year. Again, I don't know the fourth word.

David Raso: Yeah, I mean, the comp, the comp does ease in the fourth quarter, too. I'm just trying to get a sense of, should we expect deliveries to be that far below your industry outlook for most of the year in Europe? Again, I know the fourth quarter gets easier. And then-

Speaker Change: Does ease in the fourth quarter, two I'm, just trying to get a sense of should we expect deliveries to be that far below your industry outlook for most of the year in Europe again, I know the fourth.

David Rasso: Easier and then I wouldn't read into it that way David Canada.

Preston Fite: And then I wouldn't read into it that way, David. Yeah, I wouldn't try to read into it for the full year that way. I think the U.S. and Canada delivery schedule seems really solid and stable for us right now. Again, the thing we would want to remind you is that a 270,000 truck market at midpoint is a very nice market, and with PACCAR's share increasing. That feels positive to us. Yeah, I think we're just trying to figure out if, like, U.S. Canada first half of the year deliveries are up, but we're looking for class aid, down 9, is some offset, but we're just trying to get a sense of the second half of the year. How much does the U.S. and Canada build schedule come down?

Preston Feight: I wouldn't read into it that way, David.

David Raso: And then Canada. No. Okay. Okay, and

Speaker Change: Okay. Okay.

Preston Feight: Yeah, I wouldn't try to read into it for the full year that way. Then I think the US, Canada, the delivery schedule seems really solid and stable for us right now. We've again, the thing we'd want to remind is a two hundred and seventy thousand truck market at a midpoint. It's a very nice market, and with PACCAR share increasing, that feels positive to us.

Preston Fite: I wouldn't try to read and was looking for you that way.

Preston Fite: And then I think the U S. Canada, the delivery schedule seems really solid and stable for us right now.

Preston Fite: Again.

Preston Fite: I would want to remind us of 270 270000 truck market at the midpoint.

Preston Fite: It's a very nice market.

Preston Fite: With Pac our share increasing.

Preston Fite: That feels positive to us.

Preston Fite: Yes, I think we're just trying to figure out if like U S. Canada first half of the year deliveries are up eight.

David Raso: Yeah, I'm -- I think we're just trying to figure out if, like, US, Canada, first half of the year, deliveries are up 8%, but we're looking for Class 8 as an industry to be down 9%. Medium is some offset, but we're just trying to get a sense of, like, the second half of the year, how much does the US, Canada build schedule come down? That's sort of what we're trying to balance.

Preston Fite: But we're looking for a class eight as an industry to be down nine medium as some offset but we're just trying to get a sense of like the second half of the year.

Preston Fite: How much does the U S, Canada build schedule come down.

Preston Fite: That's sort of what we're trying to well I think what we shared is we're filling the third quarter right now.

Preston Fite: Well, I think what we shared is we're in the third quarter right now, and obviously, you and everyone else are watching the second half of the year to see what happens, and I think it's a little bit too much of a prognostication to guess what Q4 is going to be, but the math says it should be a good year. Our order intake looks like it should be a good year. The truck performance is good, and the margin performance is good, so we feel like it all adds up to, as far as the story can go, a really positive outlook, and at least the mix is favoring you with the vocation.

Preston Feight: Well, I think what we shared is we're filling the third quarter right now, and so obviously, you and everyone else is watching the second half of the year to see what happens, and I think it's a little bit too much of a prognostication to guess what Q4 is going to be. But the math says it should be a good year. Our order intake looks like it should be a good year. The truck performance is good. The margin performance is good. So we feel like it all adds up to, as far as the story can go, really positive outlook.

Preston Fite: And so obviously you and everyone else is watching the second half of the year to see what happens and I think it's a little bit too much of a prognostication to guess what Q4 is going to be.

Preston Fite: But the math says it should be a good year, our order intake looks like should be good year.

Preston Fite: Truck performance was good.

Preston Fite: Performance is good so we feel like it all adds up to.

Preston Fite: As far as the story can go really positive outlook.

Preston Fite: Yes.

David Raso: Yeah, at least the mix is favoring you with the vocational strength, given your position in that market. So, okay, very helpful. Thank you.

Speaker Change: Yes at least the mix is favoring you with the vocational strength given your position in that market. So okay very helpful. Thank you David that's another really good point you brought up thanks for bringing that up.

David Rasso: OK. Very helpful. Thank you. Yeah, David, that's another really good point you brought up. Thanks for bringing that up.

Preston Feight: Yeah, David, that, that's another really good point you brought up. Thanks for bringing that up.

David Rasso: Okay.

Speaker Change: Thank you.

Operator: Thank you. Our next question comes from Jerry Revich from Goldman Sachs. Your line is now open. Please go ahead.

David Rasso: Our next question comes from Jerry Revich from Goldman Sachs. Your line.

Operator: Thank you. Our next question comes from: The line is now open. Please go ahead.

Speaker Change: Now open. Please go ahead.

Cleon: Hi, this is Cleon speaking on behalf of Jerry. Our question here is, what has been the early feedback from customers on how they're thinking about the higher cost profile of the next generation trucks, and to what extent do they value the embedded extended warranty?

Cleon: Hi, this is clay on for Jerry.

Jerry Revich: Hi, this is Clay on for Jerry. Our question here is, what has been the early feedback from customers on how they're thinking about the higher cost profile of the next generation trucks? And to what extent do they value the embedded extended warranty?

[Analyst] (Goldman Sachs): Hi, this is Clay on for Jerry. Our question here is, what has been the early feedback from customers on how they're thinking about the higher cost profile of the next generation trucks? And to what extent do they value the embedded extended warranty?

Cleon: A question here, though what has been the early feedback from customers on how they're thinking about the higher cost profile of the next generation trucks and to what extent do the value of the embedded an extended warranty.

Preston Fite: Well, I think they're obviously paying attention to what it's going to be. Nobody knows what those new prices are going to be yet. There's lots of speculation out there, but it's a bit early for speculation, I think, other than to know the emission standards are going to be requiring additional aftertreatment changes to the engines and different capabilities on the engines to manage the aftertreatment. So with those, there's going to be costs, and I think at any time throughout the years, customers pay attention closely to that.

Cleon: Well I think there are obviously paying attention to what is going to be nobody knows with those new prices are going to be yet there's lots of speculation out there. It's a bit early for the speculation I think.

Preston Feight: Well, I think they're, they're obviously paying attention to what it's going to be. Nobody knows what those new prices are going to be yet. There's lots of speculation out there. It's a bit early for the speculation, I think, other than to know the emission standards are going to be requiring additional aftertreatment changes to the engines and different capabilities on the engines to manage the aftertreatment. So with those, there's going to be costs, and I think at any time throughout the years, the customers pay attention closely to that. So I think as we already shared, they kind of feel like they'd like to get their orders in a steady way and also kind of avoid any kind of point of disruption around the introduction of the new emission cycle.

Preston Fite: Other than to know the emission standards are going to be requiring additional after treatment changes to the engines and different capabilities on the <unk> to manage the after treatment.

Preston Fite: So with those theres going to be cost and I think at any time throughout the year as the customers pay attention closely to that.

Preston Fite: I think, as we've already shared, they kind of feel like they'd like to get their orders in a steady way and also kind of avoid any kind of point of disruption around the introduction of the new mission cycle, so that's what's going to pull forward the 25 and 26 purchases, I think.

Preston Fite: So.

Preston Fite: Because we already shared the kind of feel like.

Preston Fite: They'd like to get their orders in a steady way.

Preston Fite: And also kind of avoid any kind of.

Preston Fite:

Preston Fite: Point of disruption around the introduction of the new mission cycles. So that's what's going to pull forward the 25% in 2006 purchases I think.

Preston Feight: That's what's going to pull forward the 2025 and 2026 purchases, I think.

That's what's going to pull forward the 2025 and 2026 purchases, I think.

Preston Fite: Thanks. And along the same lines, as the installed base of those trucks, the 27-emission trucks, grows, will your parts market share benefit from the expanded warranty provisions? Thanks. Frankly, simply, yes.

Speaker Change: Thanks Anna.

Jerry Revich: Thanks. And, along the same lines, as the installed base of those trucks, the 2027 emissions trucks, grows, then will your parts market share benefit from the expanded warranty provisions? Thanks.

[Analyst] (Goldman Sachs): Thanks. And, along the same lines, as the installed base of those trucks, the 2027 emissions trucks, grows, then will your parts market share benefit from the expanded warranty provisions? Thanks.

Preston Fite: Along the same lines as the installed base of the of those trucks that 'twenty seven emissions types grows we have parts market share benefit from the expanded warranty provisions.

Preston Fite: Yes, it will frankly simply yes it will.

Preston Feight: Yes, it will. Frankly, simply, yes, it will.

Preston Fite: Yes, it will. Frankly, simply yes.

Preston Fite: Okay.

Operator: Thank you. Our next question comes from Jeff Kauffman of Vertical Research Partners. Jeff, your line is now open. Please go ahead.

Speaker Change: Thank you.

Preston Fite: Our next question comes from Jeff Kaufman of vertical research partners.

Operator: Our next question comes from Jeff Kaufman of Vertical Research Partners. Jeff, your line is now open. Please go ahead.

Jeff Kaufman: Jeff Your line is now open. Please go ahead.

Jeff Kaufman: Thank you very much and congratulations on a solid quarter. A lot of my questions have been asked, so I want to drill down on truck ASP. You mentioned that new truck pricing is up about 3%. But, you know, I'm calculating ASP to be closer to up to 8, so I'm assuming the difference between the 3 and the 8 is mostly mix-related. Can you help me bridge that gap and help me understand maybe how much of this could be more vocational in the U.S. versus on the road or versus, say, North American sales versus European sales, which, as David Rasso noted, are down substantially? I'm just trying to understand the difference between the two numbers.

Speaker Change: Thank you very much and congratulations on a solid quarter.

Jeffrey Kauffman: Thank you very much, and congratulations on a solid quarter. A lot of my questions have been asked, so I want to drill down on truck ASP. You mentioned that new truck pricing is up about 3%, but, you know, I'm calculating ASP to be closer to up 8%, so I'm assuming the difference between the 3 and the 8 is mostly mix related. Can you help me bridge that gap and help me understand maybe how much of this could be more vocational in the US versus over-the-road, or versus, say, North American sales versus European sales, which as David Rasso noted, are down substantially? I'm just trying to understand the difference between the two numbers.

Jeff Kauffman: Thank you very much, and congratulations on a solid quarter. A lot of my questions have been asked, so I want to drill down on truck ASP. You mentioned that new truck pricing is up about 3%, but, you know, I'm calculating ASP to be closer to up 8%, so I'm assuming the difference between the 3 and the 8 is mostly mix related. Can you help me bridge that gap and help me understand maybe how much of this could be more vocational in the US versus over-the-road, or versus, say, North American sales versus European sales, which as David Rasso noted, are down substantially? I'm just trying to understand the difference between the two numbers.

Jeff Kaufman: Yeah, a lot of my questions have been asked so I wanted to drill down on.

Jeff Kaufman: Trucking ESP, you mentioned that new truck pricing is up about 3%.

Jeff Kaufman: But yes, I'm calculating asps by closer to update so im assuming the difference between the three and the aid is mostly mix related.

Jeff Kaufman: Can you help me bridge that gap and help me understand maybe how much of this could be more vocational in the U S versus over the road versus say North American sales versus <unk>.

Jeff Kaufman: European sales, which as David Raso noted are down substantially.

Jeff Kaufman: Trying to understand the difference between the two numbers.

Speaker Change: Sure Jeff Thanks for the opening comment also.

Preston Feight: Sure, Jeff. Hey, thanks for the opening comment also. You nailed it, I already think, as you typically do. It's like if you look at the vocational market, the truck prices are high there, and I would also say that the mix between North America to Europe is a contributing factor.

Harry Skippers: Thanks for the opening comment also. The truck prices are high there, and I would also say that the mix between

Jeff Kaufman: You nailed it or do you think as you typically do is like if you look at the the vocational market. The truck prices are high there and I would also say that the mix between North America to Europe as a contributing factor.

Jeff Kaufman: Okay, so as I think forward for the year, I would probably expect your average reported ASP to be up a little more than your price increases as a result of the mix kind of carrying through 2024. Am I thinking about it wrong?

Jeff Kaufman: Okay.

Jeff Kaufman: Okay. So as I think forward for the year.

Jeffrey Kauffman: Okay, so as I think forward for the year, I would probably expect your average reported ASP to be up a little more than your, your price increases as a result of mix kind of carrying through 2024. Am I thinking about it wrong?

Jeff Kauffman: Okay, so as I think forward for the year, I would probably expect your average reported ASP to be up a little more than your, your price increases as a result of mix kind of carrying through 2024. Am I thinking about it wrong?

Jeff Kaufman: I would probably expect your average reported asps to be up a little more than your price increases as a result of mix kind of carrying through.

Jeff Kaufman: 2024.

Speaker Change: Thinking about it wrong.

Harry Skippers: That could be, that's a logical assumption based on all those things. Yeah. OK.

Jeff Kaufman: Okay.

Harrie Schippers: Yeah, that could be. That's a logical assumption if based on all those things. Yeah.

Harry Skippers: That's a logical assumption based on all of those things.

Harry Skippers: Okay.

Jeffrey Kauffman: Okay. Well, again, congratulations, and thank you.

Jeff Kauffman: Okay. Well, again, congratulations, and thank you.

Jeff Kaufman: Okay. Well, again, congratulations and thanks.

Speaker Change: Well again, congratulations and thank you.

Harrie Schippers: Yeah. Thank you, Jeff.

Preston Feight: Yeah. Thank you, Jeff.

Speaker Change: Yes, Thank you Jeff.

Jeff Kaufman: Yeah.

Operator: Thank you. There are no other questions at this time, so I'll hand you over to the management team for any further remarks.

Speaker Change: Thank you.

Operator: Thank you. There are no other questions at this time, so I'll hand back to the management team for any further remarks.

Operator: On the other questions at this time, so I'll hand back to the management team for any further remarks.

Operator: Yeah.

Ken Hastings: We'd like to thank everyone for joining the call, and thank you, operator.

Preston Fite: We'd like to thank everyone for joining the call, and thank you, operator.

Speaker Change: We'd like to thank everyone for joining the call and thank you operator.

Operator: Ladies and gentlemen, this concludes PACAR's earnings call. Thank you for participating. You may now disconnect.

Speaker Change: Ladies and gentlemen, this concludes.

Operator: Ladies and gentlemen, this concludes PACCAR's earnings call. Thank you for participating. You may now disconnect.

Speaker Change: Cool. Thank you for participating you may now disconnect.

Operator: [music].

Operator: Yeah.

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