Kenworth and Peterbilt parent Paccar Inc. reported a drop in sales and income for the second quarter, both attributed to the decrease in North American new truck demand.

"The truck market in North America remains weak and this trend is expected to continue for at least another 6 to 12 months," said Chairman and CEO Mark Pigott. "New Class 8 retail sales are 38% lower than a year ago. The industry continues to be impacted by lower freight tonnage, higher operating costs for truckers and a large number of used trucks."
Second quarter revenues from sales and financial services totaled $1.5 billion, down 29% from second quarter 2000. Net income was $39.5 million compared to $131.1 million a year ago.
Despite the soft truck market, Paccar is increasing Peterbilt Class 8 truck production by 8% and Class 6/7 truck production by 22%. Pigott cited "superior operating performance and lower operating costs" of both Kenworth and Peterbilt trucks, which has resulted in higher resale value compared to other brands.
The European truck market is having a good year, said Paccar President David Hovind, but industry production in Europe will likely end the year 10-15% below 2000 due to the slowing Eurozone economy. Paccar’s DAF subsidiary reduced production 5% in the second quarter, but Hovind noted that redesigned products, plus additional dealers throughout Europe, has enabled DAF to increase market share.
Second quarter revenues for its Fiinancial Services unit were $116 million, about the same as second quarter 2000, but pretax income dropped 58%, to $8.1 million. As company officials noted, the industry has experienced high credit losses this year due to a recessionary truck market that has caused a record number of fleet bankruptcies and truck repossessions.
Paccar net sales and financial services revenues for the first six months of 2001 were $3.1 billion compared to $4.5 billion the first half of 2000. Net income was $83.8 million compared to $286 million a year ago.