Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

Has the 2006 Diesel Engine Pre-Buy Materialized?

November 2006, by Chris Brown, Managing Editor

The government defines heavy-duty engines as those over 8,500 GVWR. This includes 250/2500 series pickups up to Class 8 big rigs. The good news for our environment comes with a premium. The 2007 emissions-compliant engines will lose 1 mile-per-gallon in fuel efficiency, will require reformulated, more costly motor oil and maintenance—though infrequent—of the diesel particulate filter. The new engines (those produced after Jan 1, 2007) will suffer a price bump as well. The new technology, along with price increases, had many speculating a run on 2006 engines was likely to occur, similar to the “2002 Pre-Buy.”I surveyed GM, Ford and Dodge fleet dealers and a few specialty truck dealers to see if the latest regulations were triggering a similar scramble. As of mid-November, the answer is no. Joe Suchecki, director of affairs for the Engine Manufacturer’s Association, says because of high demand for engines over the past three years, manufacturers were working at capacity to build as many engines as possible. Dealers are prepared as well. Jim Westley of Mark Christopher Chevrolet in Ontario, Calif. doubled his normal diesel order. Bill Bolin of Rancho Motors in Victorville, Calif., has a sizable inventory of 150 new diesel trucks with 2006 engines. So does Tim Reynolds of Peach State Trucks, a large Ford, Sterling and Western Star dealer in central and northern Georgia. “We’ve got inventory on the ground and coming in that might satisfy us until middle of next year,” says Reynolds.Why then aren’t fleets grabbing ‘06 inventory? While some manufacturers have announced specific price increases (inset), dealers say the information still hasn’t sunk in with the general public. Some say the run will come when buyers get “sticker shocked” once the 2007 engines land on lots. Dealers also expect a final run on both gas and diesel models for businesses that need the Section 179 tax deduction.While dealers may have inventory, you can forget about factory ordering a truck with a 2006 diesel engine. The factories are almost all built out, and the ‘06s on the assembly line are accounted for. Moreover, just because dealers are stocked up doesn’t mean you’ll find your units of choice. “There will be some cookie cutter trucks around for a long time,” says Michael Lynch, of Lynch Truck Center in Chicago. “But buyers need to panic if they want anything special, such as air-ride, extended cab or a specific color.”Westley says while his supply of GM 5500 and 6500 models with 2006 engines is still very good, his supply of 4500’s “has just about dried up completely.” Bolin says he won’t get his hands on the ever-popular crew-cab duallies until April 2007.For upfits, fleets will be forced to buy out of stock and have the units delivered to the upfitter, versus the more convenient factory order and ship-thru. And don’t think dealers will be able to trade for choice units. Fleets need to weigh the ramifications of buying a diesel truck that doesn’t fit exact specs with paying a premium for the ‘07 emissions-compliant engine. Or is it time to go with a gas engine? Waiting might be in order, especially for the heavy-duty pickup buyer. Big things are coming in the first quarter of 2007, when Ford releases its new F-Series “Super Duty” line and GM starts selling its 2500HD and 3500HD versions of the new Chevrolet Silverado and GMC Sierra pickup trucks.Those generation-leaping models have benefits that will go a long way to alleviate the pain of the new diesel premium. (And oh yeah, our environment is better for it.)
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