Paccar truck deliveries across the Kenworth, Peterbilt and DAF Trucks brands are expected to fall 7,000 units from second-quarter deliveries because of the ongoing semiconductor shortage, the truck manufacturer said late Monday.
Paccar (NASDAQ: PCAR) is not alone in being impacted by the microchip paucity. The impact on complete assemblies is widespread among the Big Four manufacturers — Paccar, Daimler Trucks North America, which makes Freightliner and Western Star trucks; Volvo Trucks North America, which builds Volvo and Mack Trucks models; and Traton Group’s Navistar International.
The inability to complete trucks with the chip sets critical to safety systems and other operations has led to red-tagging, which has nearly finished trucks piling up where manufacturers can find places to store them. The same is true for passenger vehicle makers, which are proportionally much harder hit by the shortfall.
Bellevue, Washington-based Paccar said after Q1 that it had substantially built and parked about 3,000 trucks, which would be released after the chips were retrofitted. The issue grew to about 6,000 trucks in Q2 and is expected to expand again.
No relief expected in Q4
“Paccar anticipates that the semiconductor shortage and associated production inefficiencies will continue in the fourth quarter,” the company said in a statement after markets closed Monday. “Paccar’s third-quarter 2021 truck deliveries are estimated to be approximately 33,000 vehicles, compared to 40,100 vehicles delivered in the second quarter of 2021.”
The semiconductor issue led to the layoffs of 350 workers at the Kenworth manufacturing plant in Chillicothe, Ohio, in August.
Truck demand is strong but cannot be met because of the supply chain issue, Paccar said.
The chip shortage has had a chilling effect across the trucking ecosystem. The shortage of new trucks is causing fleets to hold onto equipment longer. That, in turn, is starving the used truck market, which has seen prices rise as much as 70% year-over-year because of a lack of late-model used trucks.