PACCAR Plans Brazilian Plant - Analyst Blog
04 October 2011 - 1:14AM
Zacks
PACCAR Inc. (PCAR) announced that it will build
a truck assembly plant in the city of Ponta Grossa, located in the
state of Paraná in Brazil for its DAF line-up. The company plans to
invest $200 million on the 330,000-square-foot assembly
facility.
The new plant will be designed to assemble DAF LF, CF and XF
line-ups in order to meet the growing
demand of the Brazilian transport industry. The company has chosen
Ponta Grossa due to its productive workforce and proximity to
strategic supplier partners and the port of Paranaguá.
Construction
for the plant is expected to begin in late 2011 and complete in
2013. The company intends to hire up to 500 employees at the plant
over time.
PACCAR, a
Zacks #3 Rank (Hold) company, reported a profit of $239.7 million
or 65 cents per share in the second quarter of the year that more
than doubled from $99.6 million or 27 cents per share in the
prior-year quarter. However, the truck maker’s profit missed the
Zacks Consensus Estimate of 68 cents per share.
The
improvement in profit reflected strong truck sales in North America
and Europe and better aftermarket parts sales and financial
services results worldwide. However, the company’s suppliers faced
difficulty while catering to the robust increase in truck build
rates.
PACCAR
expects industry sales in the above 15-ton truck market in Europe
in the range of 230,000-250,000 units for 2011. The company
anticipates industry retail sales in the Class 8 truck markets of
U.S. and Canada in the range of 180,000-200,000 vehicles in the
year.
The company
has targeted capital investments of $400-$500 million and R&D
expenses of $275-$300 million for 2011 in order to develop new
products and enhance manufacturing operating efficiency.
PACCAR is
the third largest manufacturer of heavy-duty trucks (with a
capacity of more than 15 metric tons) in the world after
Volvo
(VOLVY) and
Daimler
(DDAIF), and has substantial
manufacturing exposure to light/medium trucks (with a capacity of
6–15 metric tons). The company continues to gain market share,
especially with its DAF nameplate.
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