Paccar Manufacturing, owner of Kenworth and Peterbilt truck brands, has reported a significant slump in sales and profits for Q4 2016. In their financial results released on 31 January, 2017, the company said that their profits dropped by nearly 17% to $288.8 million compared with the same period last year when they recorded a profit of $347.95 million. Full year profits also fell by 67% to $521.7 million.
Class 8 trucks (the heaviest trucks) were the hardest hit with sales falling nearly 22% in the fourth quarter compared to 2015.
However, the company is confident that sales will improve this year. According to Robert Christensen, Paccar’s President and CIO, the tone among dealers has been very positive. Speaking at a conference after the financial results were released, Christensen said that the positive mood alone made him very optimistic.
“I am just coming back from New Orleans where I attended the North American Truck Show. Dealers are very positive about this year” he said.
“It could be a very good year for the industry.”
Paccar which owns a third truck brand, DAF Truck, in Europe have also revealed that their overseas investment didn’t perform any better. DAF Truck’s sales for trucks, parts, and other products were down to $3.77 billion in the fourth quarter compared to $4.06 billion in the same period last year. The entire year’s sales totaled $15.8 billion, nearly $2.1 billion less than the previous year.
In terms of new deliveries, Paccar sold a total of 14,400 trucks in the U.S. and Canada over Q4 2016, a 6.9% decline compared with 2015. Over the entire year, the company sold 71,500 trucks, again, a considerable decline compared to the 91,300 trucks they sold in 2015. Sales for the Class 8 trucks mentioned earlier fell from 278,000 in 2015 to 216,000 in 2016.
Despite all this though, Paccar’s share of the U.S. and Canadian market grew by 1.5% to 28.5%, up from 27.4% in 2015.
There have also been problems in the used-truck market with external forces pushing prices 10% down in 2016. But Paccar has expressed confidence on that end saying they expect the situation to improve this year.
Finally, the company’s leadership is also keeping an eye on the Brexit situation. “We’re working in compliance with the existing regulations. And, so far, everything has been fine,” said Ron Armstrong, Paccar CEO. “But if anything changes, we’ll adapt accordingly.