Truck Model Roundup Class 6 & 7
THE NEWS IS IN THE ENGINES
Emissions regs bring cleaner exhaust and higher prices, but most midrange buyers aren't worried.
Tom Berg
Equipment Editor
Cleaner-running diesels constitute the main development as midrange trucks enter their '05 model years. In addition, some new products have been announced, and higher material costs have pushed up prices. The new engines, which will continue through '06, also bring higher sticker numbers, along with virtually odorless and smoke-free exhausts.
But price increases in general and the engines in particular haven't caused the shock that occurred among users of heavy duty trucks. Sales of both heavy and medium-duty trucks are increasing as the economy continues to expand.
The federal exhaust limits, which went into effect last January, affected many medium-duty trucks for the first time. The same limits impacted heavy duty and some midrange diesels in October '02, but imported trucks and some domestics were not involved in the Environmental Protection Agency's action at that time.
To meet the limits, most midrange diesels now have cooled exhaust-gas recirculation, higher-pressure fuel systems and advanced electronics, among other things. Many use variable-geometry turbochargers, which increase combustion efficiency and boost throttle response.
Of course, Caterpillar's ACERT (Advanced Combustion Emissions Reduction Technology) diesels use other means to meet the regs, including double-turbocharging on heavy models. However, Cat's midrange C7 and medium-heavy C9 models have single turbos.
Two other engines without EGR are Cummins' ISC and ISL which, while getting enhancements to boost performance and cleanse exhaust, are able to run on EPA-issued credits because other Cummins models were cleaner than required prior to '02 and '04 deadlines. Without EGR gear, the medium-duty ISC and medium-heavy ISL cost less than competitors' comparable models.
For example, Peterbilt sells a truck with an ISC for about $1,800 less than one with a Cat C7. Similar price advantages should remain in effect for another two and a half years at Peterbilt and the other builders that offer one or both of the Cummins models. Those include Kenworth, Freightliner and Sterling. The ISC and ISL will get EGR in January '07, Cummins says.
Prices Up This Year
Developing and equipping the diesels to meet the regulations cost engine builders many millions, and they must pass on this expense to truck buyers. The cost per truck varies. International, which extensively upgraded its V-8 and I-6 diesels to meet the new standards, pegs it at $1,500 to $2,000 per truck — a range likewise quoted by other manufacturers. Like several other builders, International identifies this expense as a surcharge on the price sticker.
International includes two additional surcharges: $250 to $500 per truck for the higher cost of steel, and $30 to $50 for higher-priced fuel used in transporting it to dealers. The surcharges are meant to be non-negotiable, but competitive pressures may sometimes force dealers to discount them, the company says.
Buyers of midrange trucks don't like higher prices for trucks or fuel, and might grumble about the poorer fuel economy that some engines deliver. But these do not constitute the issue that has been strong among buyers of heavy duty trucks, for whom fuel is a much greater expense. As always, operators of medium-duty trucks use them as tools in their widely varying businesses, some of which are improving with the economy.
So customers are buying Class 6 and 7 trucks at higher rates. Leasing and rental companies — the big-volume purchasers — have seen higher demand, so accelerated their buying late last year. Midrange truck sales are up by 20 to 25% over last year, and the demand is expected to continue through '06.
Absent, though, is the "pre-buy" desire to beat more costly '07 engines that seems to have entered the Class 8 market — a replay to the frenetic runup to the October '02 emissions-rule deadline. This again is because most midrange truck users are not preoccupied with their vehicles and what goes into them. But they do want performance and good value.
Truck builders are stepping up production and hiring workers, many recalled from layoffs during the 2000-02 slump. The latest announcement is from Sterling Truck, which is adding a three-day weekend shift staffed by 300 workers at its St. Thomas, Ont., plant. This is in addition to a weekday second shift added earlier. Other builders say their order boards are out for several months — good news after a long slump.
Engines Phased In
The changeover to the revised engines didn't necessarily occur on the first working day in January. New models had to be phased in as factory schedules allowed, and the regulation affects engines, not entire trucks. Therefore, some engine makers began building '04-spec diesels prior to the deadline and others produced enough pre-'04 diesels to meet anticipated demand well into the New Year. Those pre-January engines may be in some trucks still on dealers' lots, perhaps with lower price tags.
Improvements to the trucks themselves constitute ongoing projects at most truck builders. Many revisions and enhancements were new on '04 models or were carried over from '03 trucks, and will continue into the '05 model year that's just beginning. By now all conventional-cab models have steeply sloping noses and large windows for excellent outward visibility.
The majority of domestic manufacturers now offer two- and four-door extended cabs and crew cabs, and many assemble medium-duty 4x4s and medium-heavy 6x6s right at the factory. Popularity of automatic and automated transmissions continues to grow, and recent price reductions by Allison should push that trend further. "Two-pedal" automated models from Eaton and Mercedes-Benz should further spark competition.
Meanwhile, Mitsubishi Fuso just announced major revisions to its low-cab-forward line, and Hino's new conventionals have begun entering the market. Hino is supplying engines to Nissan Diesel America for use in its UD-brand LCF trucks so the company can avoid the huge cost of developing emissions-compliant diesels for the U.S. market. Nissan Diesel continues to build its own engines for other world markets.
Truck Model Roundup continued...
