PACCAR 2010 Annual Report Download - page 6

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The three-year recession provided a timely reminder of
the merits and strength of PACCAR’s conservative
business approach, quality products and customer
service focus.
INVESTING FOR THE FUTURE — PACCAR’s excellent
long-term profits, strong balance sheet, and intense
focus on quality, technology and productivity have
allowed the company to invest $3.9 billion since 2001 in
capital projects, new products and processes. Productivity
and efficiency improvement of 5-7% annually and
capacity improvements of over 40% in the last five years
have enhanced the capability of the company’s
manufacturing and parts facilities. PACCAR is
recognized as one of the leading applied technology
companies in the industry, and innovation continues to
be a cornerstone of its success. PACCAR has integrated
new technology to profitably support its business, as
well as its dealers, customers and suppliers.
Capital investments were $168 million in 2010. An
important transformational multi-year investment was
the opening of PACCAR’s engine plant in Mississippi.
Over 10,000 PACCAR engines have been ordered for
Kenworth and Peterbilt trucks – the first time PACCAR
has installed its own engines in North America. Other
major capital projects during the year included the
launch of new Peterbilt, Kenworth, and DAF vehicles
and the opening of a new parts distribution center
(PDC) in Santiago, Chile.
PACCAR continues to examine manufacturing, IT
and engineering opportunities in Asia, with the primary
focus being China and India. PACCAR is increasing its
component purchases and powertrain sales in China as a
result of its Shanghai and Beijing offices. The PACCAR
MX engine has been honored as best-in-class at the
Shanghai Bus Show four years in a row.
SIX SIGMA — Six Sigma is integrated into all business
activities at PACCAR and has been adopted at 230 of
the company’s suppliers and many of the company’s
dealers and customers. Its statistical methodology is
critical in the development of new product designs,
customer services and manufacturing processes. Since
inception, Six Sigma has delivered over $1.5 billion in
cumulative savings in all facets of the company. Over
11,000 employees have been trained in Six Sigma and
14,500 projects have been implemented since its
inception. Six Sigma, in conjunction with Supplier
Quality, has been vital to improving logistics performance
and component quality from company suppliers.
INFORMATION TECHNOLOGY — PACCAR’s
Information Technology Division (ITD) and its over
650 innovative employees are an important competitive
asset for the company. PACCAR’s use of information
technology is centered on developing and integrating
software and hardware that enhance the quality and
efficiency of all products and operations throughout the
company. In 2010, ITD provided innovative engine
manufacturing software for the Mississippi factory, as
well as infrastructure capacity upgrades. Over 23,000
dealers, customers, suppliers and employees have
experienced the company’s Technology Centers
highlighting surface computing, tablet PCs, an
electronic leasing and finance office, and an electronic
service analyst.
TRUCKS — U.S. and Canadian Class 8 industry retail
sales in 2010 were 126,000 units, and the Mexican
market totaled 15,000 units. European Union (EU)
industry heavy truck sales were 183,000 units.
PACCAR’s Class 8 retail sales in the U.S. and Canada
achieved a market share of 24.1% in 2010. DAF
achieved a record 15.2% share in the 15+ tonne truck
market in Europe. Industry Class 6 and 7 truck retail
sales in the U.S. and Canada were 41,000 units, a slight
increase from the previous year. In the EU, the 6- to
15-tonne market was 51,000 units, the same as 2009.
PACCAR’s North American and European market shares
in the medium duty truck segment were very good, as
the company delivered 14,500 medium duty trucks and
tractors in 2010.
A tremendous team effort by the company’s
purchasing, materials, engineering and production
employees contributed to improved product quality and
manufacturing efficiency during the year. The teams
performed admirably and exceeded customer
expectations by delivering the highest-quality products
and services in our history. The Peterbilt Nashville
plant was sold to align production capacity with
market demand.
PACCAR’s product quality continued to be
recognized as the industry leader in 2010. Kenworth
earned the J.D. Power Medium Duty Customer