Paccar sets sales record

Departments - News

March 1, 2018

Commercial truck maker Paccar brought in a record $19.5 billion in revenue in 2017 by selling 159,000 vehicles. CEO Ron Armstrong says the results stemmed from a booming truck market in the second half of last year that should continue in a strong 2018.

“Truck demand is increasing due to good economic growth, increased consumer spending, and strong commercial and residential construction, which has resulted in record freight tonnage and high fleet capacity utilization. U.S. and Canada Class 8 truck industry retail sales are expected to increase to a range of 235,000 to 265,000 trucks in 2018,” says Gary Moore, Paccar executive vice president.

Earnings were up last year as well, and President and CFO Harrie Schippers says those results should further improve this year because of tax reform passed at the end of 2017.

“The enacted tax legislation will generate positive cash flow for Paccar as well as benefit the transportation industry in the United States,” Schippers says. “The revised corporate tax rate… and accelerated machinery and equipment depreciation, will likely stimulate increased capital investment in the United States.”

Paccar estimates that its 2018 effec- tive global tax rate will be 23% to 25%, compared to approximately 31% prior to the new tax law.

Ford expands Lincoln Navigator production in Kentucky

With orders and sales outstripping expected demand, Ford Motor Co. is spending $25 million to boost productivity of Lincoln Navigator and Ford Expedition sport utility vehicles (SUVs) by 25%.

“The response from customers regarding our new full-size SUVs has been exceptional,” says Joe Hinrichs, president, Global Operations. “Using a combination of Ford’s advanced manufacturing and American hard work, and ingenuity, we’ll deliver more high-quality Lincoln Navigators and Ford Expeditions to customers than originally planned.”

The $25 million investment for additional manufacturing enhancements brings Ford’s total investment at Kentucky Truck Plant (KTP) to $925 million and allows the company to increase manufacturing line speed. Upgrades include:

  • 400 new robots, including large systems and collaborative cobots from Fanuc
  • Stratsys Fortus 3D printer to make tools, fixtures
  • Enhanced data analytics

While luxury SUVs have been successful for the past year, demand for high-end Navigator models surprised Ford’s product planning team. Nearly 85% of all Navigator buyers are choosing high-end Black Label and Reserve models. That high-end shift contributed to an average transaction price increase of more than $21,000 in January versus a year ago.

Navigator sales more than doubled last month, due to growth in Florida, Texas, and California; a competitive conquest rate of 40%; and new interest from younger consumers. For the Expedition, top-of-the-line Platinum trim models represent 29% of sales – pushing transaction price increases up $7,800 in January.

KTP, one of two Ford plants in Louisville, also makes F-Series Super Duty trucks. The other plant makes the Escape small SUV.