Revenue spikes for truck OEM captives

The financing arms of truck manufacturers Paccar and Traton Group reported increased revenue in the third quarter as market conditions stabilized. 

Both companies ramped up financing activity in Q3, hinting that truck lenders might be gaining confidence amid reduced interest rates and an uptick in consumer spending. 

Paccar Financial Services 

Paccar Financial Services’ revenue rose 15.5% year over year in Q3 to $536.1 million, according to Bellevue, Wash.-based Paccar’s Oct. 22 earnings statement. 

PFS earned $106.5 million in pretax income, down 20.4% YoY. New loan and lease volume totaled $2 billion, up 6% YoY. PFS’ new loan and lease volume in the U.S. rose 4% YoY to $1.1 billion, with increased infrastructure spending supporting demand, Paccar Senior Vice President Kevin Baney stated in the company’s earnings report. 

“Strong infrastructure spending in the U.S. has been good for Kenworth and Peterbilt’s business due to our market share leadership in vocational trucks,” he said. “The less-than-truckload segment is also performing well, while the truckload segment remains soft.” 

Kenworth, Peterbilt and DAF are Paccar’s truck manufacturing subsidiaries.  

Paccar, meanwhile, delivered 44,900 new trucks in Q3, down 10.4% YoY, largely due to a 31% decline in Europe. Its medium-duty market share jumped to 17.2% from 13.5% in Q3 of 2023.  

Traton Financial Services  

Traton Financial Services reported sales revenue of 488 million euros ($530.8 million) in Q3, a 16% increase YoY, as it beefed up its portfolio, according to Traton Group’s Oct. 28 earnings presentation. Its return on sales fell to 10.1% from 14.8% a year prior.  

Traton Financial’s sales revenue through the first three quarters of 2024 was up 22% YoY to $1.5 billion, according to a news release. Operating profit totaled $171.9 million through the first three quarters, up 39% from the same period a year ago.  

The parent company’s truck sales rose 5% YoY in Q3 to 85,274 units. Sales revenue increased 5% YoY to $12.9 billion, partly driven by improvements at American truck manufacturing subsidiary International Motors, following supply chain corrections, Traton Group Chief Financial Officer Michael Jackstein said during the company’s earnings call. 

“This boosted International’s return on sales to 10.7% in Q3,” he said. “Although the sales of the new school bus are now ramping up, the vehicle services business remains weaker year-over-year due to lower transport activity in the United States.”