Paccar group has an excellent product portfolio and premium brand DAF. The world truck market has a lot of potential in Asia like China, India but it is not present as an OEM in these markets. Paccar is not present in some good markets and this can be looked upon as an opportunity for growth. DAF is one of the top players in Western European market for trucks whose weight is more than 15TGVW. Also, DAF is in the leading position In Tractor Trailer segment. Its market share (16T+) in Europe declined sharply, however in USA & Canada (Class 8)it gained market share in 2014. Paccar sales increased in 2014 to 142,900 units compare to 137,100 units in 2013. DAF is a great company with history and a great asset to PACCAR. 2010 was historical year for DAF. 2010 year was excellent, and in overall heavy duty trucks (over 15T GVW) it was number 2 in Western Europe in sales, over MAN and Volvo. In the tractor-trailer market segment, DAF was number one.
According to the following graph, PACCAR stands fifth in the world’s truck production in 2014. Its nearest competitors are Dongfeng and VW Group.
DAF is the premium brand of Paccar group. It is successful in Europe especially in Tractor segment. The vehicles are available in Euro 6 for optimal vehicle application. There is a combination of ideal speed, gear ratio, GPS and Transport efficiency technology for optimal solution.
The vehicle rating is high in quality, performance and suitability for application. The main drawback of the brand is, it cannot penetrate outside Europe in spite of being a good vehicle. However recently DAF has entered other markets outside the EU like Taiwan, Kazakhstan, Jordan and Nigeria city distribution for long distance road transport with more than 1,000 global dealer’s network. Company is going to invest in Belgium for a cab plant. DAF has also received many awards in different categories.
Parent company DAF has given best Return of investment.
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Some Key points fot Paccar to enter into Emerging markets:
– Select big markets like India & China
– Could not be good choice to enter markets like Thailand or Turkey
– Intorduce products in MDT and LDT segment also
– First prepare Blur print for next 4 years
– Make USP for their products
– Network Strategy & Product Support
– Branding as per target group
PACCAR is celebrating 110 years of success in 2015. For Paccar group, advance technology has become a part of its strategy. For instance, PACCAR has integrated new technology such as 3D component printing to profitably support its business, dealers, customers and suppliers. Also, Its products are environment friendly. Its Net income, revenue and operating cash flow have come down in 2014 compared to 2013. The major issue is that the R&D budget is around nearly half of what it was in 2010.
PACCAR has an exceptionally good credit rating of A+/A1. Over the last ten years, the quarterly cash dividends have more than doubled. 2014 was an excellent year for PACCAR as it achieved record revenues of $18.99 billion. This record was because of a robust truck market in North America and worldwide growth in aftermarket parts sales and financial services. In 2014, the after-tax return on revenues was 7.2%.
As per the following graph, PACCAR is on the top and its nearest competitors being Caterpillar and Deere. And it is way above the S&P market index.
