PACCAR 2009 Annual Report Download - page 31

Download and view the complete annual report

Please find page 31 of the 2009 PACCAR annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 79

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79

 European net sales and revenues increased 13% to $6.62 billion from $5.86 billion in 2007 as DAF achieved higher
market share in a similar sized truck market to 2007. DAF trucks delivered a record 63,700 units during 2008, a
6% increase over 2007. The 15 tonne and above truck market in Western and Central Europe was 330,000 units
compared to 337,000 units in 2007. DAF’s 2008 market share of the 15 tonne and above market increased to 14.2%
compared to 13.9% in 2007. DAF market share in the 6 to 15 tonne market increased to 9.3% in 2008 from 8.3% in
2007. In Europe, demand was strong for the Company’s high-quality trucks and parts during the first nine months
of 2008, including growth in Central and Eastern Europe. Industry demand slowed throughout Europe in the
fourth quarter.
Net sales and revenues in Mexico, Australia and other countries outside the Company’s primary markets declined
11% to $2.10 billion in 2008 due to lower new truck deliveries. Truck unit deliveries in Mexico, Australia and other
countries outside the Company’s primary markets decreased 17%.
Truck income before taxes was $1.16 billion compared to $1.35 billion in 2007. The lower income reflects the effects
of lower truck production and gross margins from reduced demand and higher material costs, partially mitigated
by improved operating efficiency.
Net sales and revenues and gross margins for truck units and aftermarket parts are provided below. The aftermarket
parts gross margin includes direct revenues and costs, but excludes certain truck segment costs.
2008 2007 % change
Truck net sales and revenues:
Trucks $ 11,281.3 $ 11,571.3 (3)
Aftermarket parts 2,266.1 2,283.0 (1)
$ 13,547.4 $ 13,854.3 (2)
Gross margin:
Trucks $ 1,141.7 $ 1,242.9 (8)
Aftermarket parts 795.2 816.7 (3)
$ 1,936.9 $ 2,059.6 (6)
Gross margin %:
Trucks 10.1% 10.7%
Aftermarket parts 35.1% 35.8%
14.3% 14.9%
Truck segment gross margin as a percentage of net sales and revenues was 14.3% in 2008 and 14.9% in 2007. The
decrease in margin from 2007 resulted from the effects of weaker truck demand in North America and higher
material costs partially mitigated by strong demand for the Company’s products in Europe in the first nine months.
Truck Outlook
Worldwide recessionary economic conditions are expected to continue to affect demand for heavy duty trucks in
2010. The heavy duty truck sales in the U.S. and Canada are expected to be in the range of 110,000–140,000 units,
up slightly from 2009, reflecting general economic growth and an aging truck fleet. The current challenging
economic conditions in Europe are expected to continue in 2010 with the market size of above 15-tonne vehicles
expected to be in the range of 150,000–180,000 units. International markets are also expected to remain weak into
2010. Research and development spending in 2010 is expected to be between $225-$250 million, focusing on new
product development and manufacturing efficiency improvements. The Company will begin assembling PACCAR
MX engines at the Columbus, Mississippi engine production facility in mid 2010. See the Forward Looking
Statement section of Management’s Discussion and Analysis for factors that may affect this outlook.