PACCAR Inc

What they do

The company operates in three segments: Truck (design, manufacture and distribution of commercial trucks), Parts (aftermarket parts distribution), and Financial Services (financing and leasing for customers and dealers). Its trucks are built in plants across the U.S., Europe, Australia, Brazil, Canada and Mexico. Substantially all trucks are sold to independent dealers.

Revenue drivers

• Truck segment — Largest segment, 68% of 2025 net sales and revenues. Sales were $19.37 billion in 2025, down from $24.84 billion in 2024 due to lower deliveries in all major markets.
• Parts segment — Aftermarket parts distribution for trucks and related vehicles. Sales were $6.87 billion in 2025, up from $6.67 billion in 2024, driven by higher sales in the U.S., Canada and Europe. Second quarter 2026 parts revenues were a record $1.75 billion.
• Financial Services segment — Financing and leasing mainly for PACCAR products; revenues were $2.21 billion in 2025, up from $2.10 billion in 2024, driven by portfolio growth and higher yields. The portfolio had total assets of $22.80 billion at year-end 2025 and $22.27 billion at June 2026.

Recent performance

In the second quarter of 2026, PACCAR reported net sales and revenues of $7.55 billion and net income of $752.0 million ($1.43 per diluted share), compared to $7.51 billion and $723.8 million ($1.37 per diluted share) in the prior year period. For the first half of 2026, net sales were $14.32 billion and net income was $1.36 billion ($2.57 per diluted share), up from $1.23 billion ($2.33 per diluted share) in 2025, which included a $264.5 million after-tax charge related to civil litigation in Europe. Truck sales in the second quarter of 2026 were $5.25 billion, parts sales $1.75 billion, and financial services revenues $549.7 million. Global truck deliveries in the second quarter were 38,700 units.

Strategy

Management emphasizes investing in new and expanded facilities, next generation clean diesel and alternative powertrains, integrated connected vehicle services, and flexible manufacturing capabilities. In 2025, it invested $728.5 million in capital projects and $445.5 million in R&D, including a robotic chassis paint facility in Ohio and a new engine remanufacturing facility in Mississippi. Capital investments in 2026 are expected to be $700–$750 million and R&D $450–$480 million. The company is also focused on minimizing tariff exposure by producing locally for North American markets.

Risks

• Tariffs and trade policy — Import tariffs imposed since March 2025 have negatively affected truck order intake and profit margins; the company is mitigating but the impact is ongoing.
• Freight and economic cycle — Softer freight conditions or a weaker economy could increase past due accounts, truck repossessions and credit losses in the financial services segment.
• Emissions regulations — Changes to EPA27 NOx rules or compliance requirements could affect product costs and customer purchasing decisions; a July 2026 NPRM has proposed revisions, but uncertainty remains.
• Geopolitical uncertainty — The company cites potential impacts from geopolitical instability, which could disrupt operations, supply chains or demand in its global markets.

Outlook

For 2026, management expects U.S. and Canada Class 8 retail sales of 230,000–270,000 units (2025: 232,800); European over-16-tonne registrations of 290,000–330,000 (2025: 297,000); and South American registrations of 100,000–110,000 (2025: 115,000). PACCAR Parts sales are expected to increase 3–5% in 2026 compared to 2025, and average earning assets in Financial Services are expected to be comparable to 2025. The used truck market is improving, and the company expects to benefit from higher freight rates and the recent Supreme Court ruling invalidating IEEPA tariffs.