Operator: Our next question today comes from Steven Fisher from UBS.
Steven Fisher : Preston, you gave us some reasons for generally high margins in terms of the investments in technology and manufacturing, but I guess what was so much better than you expected in margins in the quarter at the TPO level? I mean still like 100 basis points above your midpoint. So just curious kind of was there any 1 of those factors or just conservatism that you’re now baking into your numbers?
Preston Feight: I think that we — as we’ve shared with you, Steven, is that we’re looking at the steadiness of supply has been improving, but we certainly had some impacts from that. So that’s a factor in there. I think that our rest of world markets are doing exceptionally well for us in addition. So that’s a factor in there as well. And we just had a — we had a smoother set of builds that probably happened for us. And those are probably the biggest things.
Steven Fisher : Okay. That’s helpful. And then I’m just curious what indications do you have from your suppliers for costs on 2024. At this point, does it make sense to assume that the costs are generally going to be higher? And do you have an overall sort of cost strategy as you think about framing up 2024 at this point?
Preston Feight: Yes. I think that as you can see, we see various commodities moving in different directions, so moving in a down — we’re positioned some moving up. And obviously, there’s some labor pressure. Those are probably the biggest influencers on cost right now. And I think that we’ll look at 2024 when we get into January and see how that’s looking then.
Steven Fisher : Okay. I just had 1 quick clarification. The cost you mentioned on the R&D — or sorry, on the new battery plant. How does that flow through the financials? Is that going to be a — is that part of R&D costs? Or where does that flow through?
Harrie Schippers : That won’t show up as R&D, it will show up as an investment as part of our 30% investment in the joint venture.
Operator: Our next question is from Tim Thein from Citigroup.
Tim Thein : The question, I just wanted to come back, maybe press in a little bit higher level thoughts on Parts in ’24. If you look back, historically, there has been some relationship when PACCAR’s truck volumes declined and industry profitability comes — or is under pressure, that has weighed on parts sales, obviously not nearly the same kind of magnitude. But just as you — but we’re coming through weird times from inventory stocking levels and — and I can imagine that maybe there was some restocking that helped Parts growth this year. But as you just kind of weigh this all together in an environment where global truck volumes are declining, and from what we can observe, trucker profitability in developed market’s under some pressure. How do you think that all comes together in terms of PACCAR’s Part sales in ’24? Any just — I know you’re not going to give us for an estimate, but just how you’re thinking about that for ’24.
Preston Feight: Absolutely, Tim. Fun to talk about it. I think that the overarching view I take of it is our parts team has done a great job of transitioning over the past several years, they’re not really parts providers, they’re transportation solutions providers, right? So they’re thinking about what’s valuable to the customer and what’s valuable in the engagement with the dealer. And they’ve done a really good job of that. And I think that’s foundationally lifted their performance over time, which goes along to the — was it roughly 9% per year growth they’ve had over the past 20 years. So I think that they’ve done a really nice job of continuing to evolve the business through the application of technology and analytics, and I expect that, that will over the medium term continue and long-term continue.
