PACCAR Australia has notified its customers of a price increase on all new Kenworth trucks from March next year.
In an email to customers sighted by Big Rigs, PACCAR Australia managing director Andrew Hadjikakou didn’t specify what the exact increase would be but said PACCAR is “deeply grateful for your understanding in this difficult business environment.”
“As you would be aware rising inflation has driven increased costs of products and services in Australia, and abroad,” explained Hadjikakou.
“This environment has resulted in unprecedented cost increases to our trucks and despite tireless work by our teams to suppress and absorb these costs, they have proven to be unavoidable.
“We have considered every possible way to avoid passing through price increases to existing orders such as your own, but we face a reality where the price of existing truck orders will need to increase. PACCAR has not taken this decision lightly.”
PACCAR declined to comment further on what other measures it had explored to keep costs down.
“We appreciate your business partnership, commitment to Australian Manufacturing and are deeply grateful for your understanding in this difficult business environment,” added Hadjikakou.
“The PACCAR team remains focussed on providing the best quality products and support for our customers. We hope that these qualities, which undoubtedly influenced your purchasing decision, remains prominent in your mind now and into the future.”
One large Kenworth dealer told customers they would now have the opportunity to cancel their order at no charge providing it was done in writing before production deadline.
At deadline for this issue, Big Rigs wasn’t made aware of any other manufacturer announcing a price increase in 2023.
But a source familiar with the new truck market said he’d be very surprised if others don’t follow PACCAR’s example.
“You’d be struggling to find anyone who hasn’t lifted their price due to the rising cost of raw materials and shipping,” the industry insider said.
“That’s the cold hard facts.”
Meanwhile, the new truck market is celebrating its best ever year in 2022.
Although exact numbers for 2022 weren’t available at an earlier than usual deadline for this issue, the Truck Industry Council (TIC) was predicting that previous best mark of 41,628 would easily be smashed when the final numbers are tallied.
By the end of November the year-to-date (YTD) tally was already at 40,267 and with December sales averaging out at about 3400 trucks, a new mark was a formality.
Although Volvo had a big finish to 2022, trumping Kenworth in November sales, Australia’s favourite heavy-duty truck still boasted the biggest market share of the sector with 20.2 per cent of units moved.
Volvo was next on 16.4 per cent, followed by Isuzu on 13.8 per cent. The others were headed by Scania on 7.5 per cent, and marginally ahead of a bunched pack.
“It is pleasing to see the solid sales continue through November, with a number of new records set,” said TIC CEO Tony McMullan.
“These record sales could not come at a better time, with the average age of trucks cracking the 15-year mark in 2021 and with Australia having one of the oldest truck fleets in the Western world, we need record, or near record sales to reverse this fleet aging trend.
“An old truck fleet is not good for road safety, nor noxious and greenhouse emissions, or for operator productivity.”