The Company and its subsidiaries own and operate manufacturing plants in five U.S. states, three countries in Europe, and one each in Australia, Canada and Mexico. The Company also has a number of parts distribution centers, sales and service offices, and finance and administrative offices which are operated in owned or leased premises in these and other countries. Facilities for product testing and research and development are located in Washington state and the Netherlands. The Company’s corporate headquarters is located in owned premises in Bellevue, Washington. The Company considers all of the properties used by its businesses to be suitable for their intended purposes.

                Substantially all the Company’s manufacturing facilities increased their capacity in 2007 compared to the prior year. The Company continuously invests in facilities, equipment and processes to provide manufacturing and warehouse capacity to meet its customers’ needs.

                Construction of PACCAR’s new engine production facility and technology center in Columbus, Mississippi began in July 2007 and is expected to be completed in late 2009.  PACCAR’s 12.9-liter and 9.2-liter diesel engines manufactured in Columbus will be installed in Kenworth and Peterbilt trucks and may be exported to meet DAF’s production requirements.

                The following summarizes the number of the Company’s manufacturing plants in operation by geographical location within indicated industry segments:

                The Company and its subsidiaries own and operate manufacturing plants in
five U.S. states, three countries in Europe, and one each in Australia, Canada
and Mexico. The Company also has a number of parts distribution centers, sales
and service offices, and finance and administrative
offices which are operated in owned or leased premises in these and other countries. Facilities for product testing and
research and development are located in Washington state and the
Netherlands. The Company’s corporate headquarters is located in owned premises
in Bellevue, Washington. The Company considers all of the properties
used by its businesses to be suitable for their intended
purposes.

                Substantially all the Company’s manufacturing facilities increased their
capacity in 2007 compared to the prior year. The Company continuously invests in
facilities, equipment and processes to provide manufacturing and warehouse
capacity to meet its customers’ needs.

                Construction of PACCAR’s new engine production facility and technology
center in Columbus, Mississippi began in July 2007 and is expected to be
completed in late 2009.  PACCAR’s 12.9-liter and 9.2-liter diesel engines
manufactured in Columbus will be installed in Kenworth and Peterbilt trucks and
may be exported to meet DAF’s production requirements.

                The following
summarizes the number of the Company’s manufacturing plants in operation by
geographical location within indicated industry segments:

ITEM 2.          PROPERTIES.

The Company and its subsidiaries own and operate manufacturing plants in five U.S. states, three countries in Europe, and one each in Australia, Canada and Mexico. The Company also has a number of parts distribution centers, sales and service offices, and finance and administrative offices which are operated in owned or leased premises in these and other countries. Facilities for product testing and research and development are located in Washington state and the Netherlands. The Company’s corporate headquarters is located in owned premises in Bellevue, Washington. The Company considers all of the properties used by its businesses to be suitable for their intended purposes.

Substantially all the Company’s manufacturing facilities increased their production in 2005 compared to the prior year. The Company continuously invests in facilities, equipment and processes to provide manufacturing and warehouse capacity to meet its customers’ needs.

6

The Company and its subsidiaries own and operate manufacturing plants in five U.S. states, three locations in Europe, and one each in Australia, Canada and Mexico. Several parts distribution centers, sales and service offices, and finance and administrative offices are also operated in owned or leased premises in these and other countries. Facilities for product testing and research and development are located in Washington state and the Netherlands. The Company’s corporate headquarters is located in owned premises in Bellevue, Washington. The Company considers all of the properties used by its businesses to be suitable for their intended purposes.

All the Company’s manufacturing facilities increased their production in 2004 compared to the prior year. The Company continuously invests in facilities, equipment and processes to provide manufacturing and warehouse capacity to meet its customers’ needs.

The following summarizes the number of the Company’s manufacturing plants by geographical location within indicated industry segments: