OEMs Soften Blow Of 2007 Price Hikes

Expect to pay $5,000 to $10,000 more per vehicle.


Fuel economy is not expected to take a hit, either, with most manufacturers anticipating no more than a 1 percent drops in mileage. Peter Karlsen, president and CEO of Volvo Trucks North America says his company’s engines “will deliver fuel economy equivalent to our current engines.”

Maintenance Costs To Increase
According to the new regulations, diesel particulate filters will need to be cleaned of ash deposits roughly every 150,000 miles. Those cleanings will cost about $150 each, and most manufacturers are debating whether to subsidize dealer efforts to purchase the required cleaning systems or to set up central cleaning services within their companies.

Most companies agree that the new engines will likely increase other annual maintenance costs by $350 to $400 per vehicle per year.
But one maintenance issue that could pose a problem is under-the-hood temperatures, as the new systems are expected to raise engine running temperatures. This will place a strain on air conditioning, intake and cooling systems.

After 2002, the last time the EPA imposed stricter engine requirements, Index Sensors & Controls, Stanwood, WA, an engine temperature and pressure sensing technology provider, reported that trucking fleets saw “premature failures of air conditioner compressors and clutches after less than a year.”

No matter what the new engines will do, though, with a little less than a year to go, they are definitely right around the corner. There is not much that fleets can do to prevent higher costs, and tax incentives to help defray some of the anticipated price increases seem all but dead, but there are a few things fleet managers can do to soften the blow.

One option is to rebuild or retrofit existing trucks with the new technologies. The costs to do that are estimated at between $15,000 and $18,000 per vehicle, according to industry experts.

Many others have engaged in a pre-buy of current 2006 models. Truck makers and industry watchdogs alike expect 2006 sales to be very high as more and more fleets stock up now. In January, orders for new Class-8 trucks in North America reached an all-time high of 43,100 for a single month, according to American Commercial Transportation (ACT) Research, Columbus, IN.

Any pre-buy, though, will not have lasting effects on the overall industry, according to NPTC’s Petty, because of increased demand for trucks across the country. “The pre-buy in ’06 will affect sales early on in ’07, but there will be a greater demand for vehicles with the country’s continued economic growth,” he says. “The momentum of the truck market alone will carry the industry beyond any increases in price or backlash.

“The industry will continue to evolve into even higher emissions standards as we move to 2010, and in probably about three or four years, we’ll have trucks whose exhaust is cleaner than the air that they’re releasing into,” he concludes.

Already have an account? Click here to Log in.

Enhance Your Experience.

When you register for FoodLogistics.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

OR

Complete the registration form.

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required
Required