Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Meredith Taylor - Barclays Capital.
Meredith Taylor - Barclays Capital
I’m hoping you can talk a little bit about your expectations for how gross margins can trend over the next several quarters and maybe, just to set the stage, if you can talk about the modest decline you saw in gross margins sequentially in the truck business. I realize that aftermarket was a lower percentage of total sales.
If I proud the same parts gross margin that we saw in the second quarter, it doesn’t account for all the difference. Where there some factors with respect to regional mix, factory utilization or pricing that impacted the second quarter to third quarter move in gross margins and then if you could talk about how that rolls forward, that’s great. Thank you.
Mark Pigott
Gross margins, are made up of many different groups within the company, Europe, between the third and second quarter continue to have a challenging time and throughout the entire industry. In fact, I would say throughout most industries in Europe, so that definitely had an impact. Going forward as the economy improves, while we would expect that our gross margins would improve also and I think nothing unusual in any aspect of the business except our team doing a good job of working through a very difficult recession.
Meredith Taylor - Barclays Capital
Then, maybe if you can talk a little bit more about the outlook for 2010 in Europe, specifically if you can give us some color around the scenario that would define the low end of the 150 to 180 range and we seem to be hearing from some of your peers that the end market demand at least feels like things are bouncing alone the bottom, although a recovery may be sometime off. So, how should we be thinking about the low end of your scenario and maybe some, some likelihood that you assign to the low end versus the high end?
Mark Pigott
We look at it as a range. We tend to be more on the conservative side than some of our competitors and we certainly would like it to be at the top end of that range. Europe is working through its own recession and has its own challenges versus the North American economies, similar, but different and kind of a split now between Northern European recoveries maybe a little bit sooner than a Southern European.
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