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New rules affecting truck buyers

09/01/2006

Stringent emissions requirements that take effect for diesel engines built next year leave truck buyers in a quandary as time runs out for purchasing vehicles built under the old rules, says Gordon Moore of McCormick Motors, Inc.

“This is a really, really big deal. All of a sudden, there’s a huge bump-up in price,” says Moore, who attended a two-day workshop on the subject at the Truck Technology Conference in Tampa in February but thinks understanding of the changes is insufficient in the industry.

“It’s been in some trade journals and medium-duty and heavy-duty trucking magazines. Most of it’s been coffee-house rumor.”

Still, the changes have spiked truck sales this year as some buyers, including large fleets, have opted to purchase trucks built under the old rules. Most manufacturers shut down special orders early in the year because of demand, and the last stock orders will be produced in the next few months.

“Our market has been very good,” Moore says. “They saw this coming, so they preordered a lot of trucks. Most dealers preordered a lot of stock in anticipation of this. When this stock is gone, it’s gone, and there will be a significant price increase.”

The new rules will hike the cost of trucks between $3,000 and $6,000 and increase some operational and maintenance costs, but the low-sulfur fuels that will be available, as part of the change will decrease efficiency by 3 to 5 percent.

“The vehicles do not require any retrofitting, but all the fuel that’s being produced and will appear in the pipeline will be the low-sulfur diesel.” He says. “The older vehicles will run on it, but they will not run as efficiently on it. That will be the only diesel fuel that will be available.”

On the other hand, low-sulfur oils required for the new engines will cost about twice as much as ordinary oil, and the requirements for new trucks include servicing of particulate filters between 100,000 and 150,000 miles.

“It’s not going to be like an oil change,” Moore says. “It’s going to be a component change-out.”

The new rules require diesel engines to cut nitrogen oxide and hydrocarbons in half and particulate matter by more than 90 percent compared to 2004 standards. The standards will be cut again in 2010.

“The EPA has also lowered the limit for diesel fuel sulfur from 500 parts per million (ppm) to 15 ppm for diesel engines that meet the 2007 emissions standard,” he says. “This new ultra-low sulfur fuel will be available beginning October 2006 and may add 5 cents to 10 cents per gallon to fuel costs.”

Buyers must choose soon.

“You’re on the horns of a dilemma,” he says. “The new trucks will probably initially be more expensive to service. If you want to be a green kind of company, you should wait. If you want to same some money on your front end, you need to buy new equipment now”