PACCAR Inc (NASDAQ:PCAR) Q4 2023 Earnings Call Transcript

Daniel Johansson: Thank you. Thank very much for taking my question. Sorry, maybe this has already been discussed. And I guess, the question is, has a lot of different levels to think about. But thinking about your cost per unit and how that has been going up a little bit here over the last few years? I mean, there’s mix, there is more content per unit, et cetera, et cetera. But how to think about that going forward? And especially so given that you had pretty high capacity utilization last year?

Preston Feight: Well, I think about costs in terms of — there’s the normal inflationary side of it. I think the other side of it to contemplate is we’re building trucks that are more efficient than they ever have been for our customers. Sometimes that efficiency comes with higher purchase price, but as a percentage of their total operating costs, the purchase price is not significant compared to the fuel utilization. So it’s beneficial to PACCAR in that way and beneficial to our customers to have high-performing products that are very efficient even if that drives up purchase price. And then another element to that is, of course, regulatory. Because as you anticipate future regulatory changes, those typically come with added componentry to meet emission standards, which is also a factor in increasing cost and price. So those are some of the things that go into that cost equation for us. And we’ve seen price more than keep up with that.

Daniel Johansson: And should we expect cost per unit to continue to go up, you think, even in a very good volume scenario?

Preston Feight: I think they could. It depends on the inflationary state. It depends on the state of competition and whether there’s more added content that has to be added to the trucks.

Daniel Johansson: Okay. Thank you very much.

Preston Feight: You bet. Thanks for the question and we appreciate all the questions.

Daniel Johansson: Thanks.

Operator: Thank you. This is the end of the Q&A session. So I’d now like to hand back for any further or closing remarks.

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

Operator: Thank you, everyone, for joining today’s call. You may now disconnect your lines, and have a lovely day.