Harrie Schippers : We — the portfolio quality, Steve, continues to be very strong. We have a portfolio of almost $20 billion now. with past dues less than 1%. So yes, higher interest rates do drive higher payments for our customers. But with all the new products that we launch that have better fuel efficiency, they do see savings on the fuel bill, that more than offset the higher interest payments in today’s environment.
Operator: Our next question is from Chad Dillard from Bernstein.
Chad Dillard : So first question for you is how much visibility do you have into engine rebuilds? And what does it tell you about your engine parts demand or what it could look like more broadly into 2024?
Preston Feight: Well, I think we have pretty good visibility to the life of the engine. So our Parts team does a fantastic job of tracking miles or a lot of our vehicles are connected, so we get to see what miles are accumulating. We obviously manage what’s going on from an engine parts utilization standpoint. And then as the population is still reaching a point of maturity, we expect to see the amount of rebuilds increasing over time. So that should be still accretive to the parts business.
Chad Dillard : Got it. That’s helpful. And the second question, can you talk about your approach to managing the growth in air pocket in ’24, just given that you do have a prebuy ahead of the 27 emission standards that could probably start in 2025 and ’26? I just want to get a sense for how you’re thinking about labor line rates, maintaining your suppliers, so you can catch the rebound.
Preston Feight: Yes. I think that what we see is right and we’ve been talking about this for a little while with you guys is our approach has been to spend money in research to make sure we have the right products sitting out there, and we do. So we’re really well positioned with the newest product line. That matters a lot. And then I think where we’re sitting in time is markets that haven’t been able to be fully met for a few years, and now people are starting to think about what the future might be in terms of 2027 emissions, which could make this a stronger for longer kind of a good approach Obviously, your word was air pocket. I got to tell you, I’ve never heard that word before, but I’ll use it with you. And if it’s an air pocket next year, we’ll see what that looks like as we get into 2024.
Operator: Our next question is from Rob Wertheimer from Melius Research.
Rob Wertheimer : Yes. One market question then hopefully, more interesting strategic. So just on the outlook, is there any material mix shift kind of coming through in your customer conversations or order flow towards vocational? And does that outlook anticipate a decline in sentiment? Or does it sort of follow along with what you’ve already seen in the customer base?
Preston Feight: Rob, I think you’re paying attention to what’s going on. I mean we do see a really strong vocational market out there. We see a strong medium-duty market. The LTL market is very strong. And then as we were talking about in the last question from Chad, the idea that I think customers that are sophisticated or paying attention to the next few years and want to keep their fleet age at a low level. So there’s a lot of contemplation for them to stay on a smart buying cycle for them. And frankly, as we’ve said and we keep saying, right, these new trucks are providing good value to them. So there’s a reason for them to keep buying trucks. And I think that all factors into where we think the market is going to be looking forward.