PACCAR Research and Development Increases to Record Levels

July 26, 2007 Bellevue, Washington PACCAR is investing over $1 billion in research, development and capital investment programs, in the near term, to support enhancements to its high-quality products, efficient facilities, aftermarket services and information technology, shared Mark Pigott, chairman and chief executive officer.  In addition to the new engine plant being constructed in Mississippi, there are major investments underway at every truck plant to increase manufacturing efficiency by 20 percent, and develop new product ranges at DAF, Kenworth and Peterbilt, as well as update PACCAR Financials customer service software and expansion of PACCARs Asia activities.  In Europe, the DAF XF105, International Truck of the Year 2007, powered by the new PACCAR MX 12.9-liter engine, has enabled DAF to reach record build levels, with additional production increases scheduled for the fourth quarter.  In North America, Kenworths new industry-leading T660 has set the industry standard for aerodynamic performance and efficiency and Peterbilts exciting new range of Class 5-8 vehicles continues to generate enthusiastic market acceptance.

Industry truck sales in Western Europe above 15 tonnes are strong and should reach 265,000 to 280,000 units this year, said Aad Goudriaan, PACCAR vice president and DAF president.  Strong Central and Eastern European markets should be 85,000 units by year-end.  DAF will continue to increase its record production levels to meet customer demand.  DAF has benefited from 5-7 percent annual productivity enhancements, new powertrain test facilities and PACCAR Financial and PACCAR Parts initiatives.  The result is increased market share, higher margins and excellent customer support of our products and services, added Goudriaan.

In Mexico, where PACCAR is the market share leader at 36 percent, the industry is projected to reach 32,000 units in 2007, commented Tom Plimpton, president.  PACCAR Mexicos new $74 million factory has increased capacity by 50 percent and is producing the highest-quality vehicles to meet this unprecedented demand.  In addition, Kenworths U.S. and Canadian manufacturing facilities are building trucks for the Mexican markets.

The number of PACCAR vehicles in service worldwide has increased by over 25 percent in the last five years and now totals over 1,500,000 vehicles, providing a solid foundation for future revenue growth, commented Rick Gorman, PACCAR vice president and PACCAR Parts General Manager.  As a result, PACCAR Parts is increasing its investment in new parts distribution centers (PDCs) to provide industry-leading customer service levels.  The recently opened Oklahoma City PDC and the new Budapest Hungry PDC under construction, in addition to new logistics systems for dealer and customer use, are generating 15 percent revenue growth.

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.