PACCAR Announces New Manufacturing and Assembly Facility

January 9, 2007, Bellevue, Washington PACCAR Inc unveiled plans for a new $400 million powertrain manufacturing and assembly facility in the Southeast United States.  PACCARs outstanding profits, excellent balance sheet and intense focus on quality, technology and productivity enhancements have enabled the company to consistently invest in its products, services and processes during all phases of the business cycle, commented Mark Pigott, chairman and chief executive officer.

Strong demand for high-quality DAF, Peterbilt and Kenworth products has resulted in record production and market share for PACCAR worldwide, said Pigott.  The industry-leading reliability and resale value of PACCARs light-, medium- and heavy-duty commercial vehicles, including the success of PACCARs powertrain, as well as exciting initiatives such as PACCARs diesel-electric hybrids, remote vehicle diagnostics and software development have driven stellar financial performance.  This significant investment in a new powertrain facility, as well as a Technology Center, will ensure that PACCAR maintains its position of global technology leadership and meets customer requirements.

The 400,000-square-foot facility strengthens PACCARs global manufacturing and assembly capability and positions PACCAR to capitalize on growing opportunities in North America, Europe and Asia, added Pigott.  The $400 million investment in PACCARs newest facility complements the $2.5 billion invested over the last ten years to accelerate award-winning product development, Six Sigma implementation, customer after sales support and dynamic information technology programs in our capital goods and financial services markets.

Construction of the facility will begin in mid-2007 and is targeted for completion in 2009, stated Jim Cardillo, executive vice president.  PACCAR has learned from DAF and its customers the performance and cost advantages of installing its own powertrain, as well as the benefits of additional aftermarket parts and service business for our dealers.  Offering a PACCAR powertrain to our North American customers will provide additional choices in their vehicle specifications, added Cardillo.

PACCAR continues to set the standard for financial performance for capital goods companies worldwide.  PACCAR earned a record $1.1 billion on revenues of $12.2 billion in the first nine months of 2006.  PACCAR is the 489th largest public company in the world and has achieved a 22 percent CAGR (compound annual growth rate) of earnings per share over the last ten years.  Shareholder total return has averaged 25.4 percent per year for the last decade, versus 8.4 percent annual return for the Standard & Poors 500 Index over the same period.

Tom Plimpton, president, added, This will be PACCARs most technologically advanced facility and reinforces our efficient manufacturing platform that builds the highest-quality products in the industry.  The manufacturing facility will be configured for maximum flexibility to supply products and components to PACCAR facilities and customers on a global basis. Plimpton noted, DAF, Kenworth and Peterbilt products have the best resale value in the industry and deliver the lowest operating cost for our customers.

The DAF XF105 earned the prestigious International Truck of the Year 2007 award.  DAF is the only manufacturer to win the award three times in the last ten years.  The new XF105, powered by the new PACCAR MX 12.9-liter engine, is a stunning example of DAFs product leadership in Europe and a direct result of PACCARs investment strategy, said Aad Goudriaan, DAF Trucks president.  The completion in 2007 of the new 76,000-square-foot PACCAR engine research center in Eindhoven, the Netherlands, will further enhance DAFs capability to develop and integrate powertrains for our markets worldwide.

The new Kenworth T660 begins production next month and is the latest evolution of Kenworths aerodynamic product line.  The T660, with modern styling, superior forward lighting, enhanced aerodynamics and fuel economy, and superior driver comfort, reinforces Kenworths Worlds Best leadership performance, said Bob Christensen, PACCAR vice president and Kenworth general manager.

Peterbilt Motors Company introduced a new product range in 2006 featuring vehicles designed for aerodynamic, traditional, vocational and medium-duty markets.  These new vehicles are the result of the largest product development investment in the history of Peterbilt and represent the best products Peterbilt has ever offered, said Bill Jackson, PACCAR vice president and Peterbilt general manager.  In the United States, Kenworth and Peterbilt have earned 20 J.D. Power and Associates medium- and heavy-duty truck customer satisfaction awards, leading all manufacturers.

PACCAR is a global technology leader in the design, manufacture and customer support of high-quality light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates.  It also provides financial services and information technology and distributes truck parts related to its principal business.

PACCAR shares are listed on NASDAQ Global Select Market, symbol PCAR, and its homepage can be found at www.paccar.com.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act.  These statements are based on managements current expectations and are subject to uncertainty and changes in circumstances.  Actual results may differ materially from those included in these statements due to a variety of factors.  More information about these factors is contained in PACCARs filings with the Securities and Exchange Commission.

PACCARs manufacturing facility and Technology Center will open in 2009.