No consensus from OEM leaders on pre-buying

LOUISVILLE, Ky. (March 22, 2002) — Although they all admitted that pre-buying trucks to get around the Oct. 1 EPA-mandated regulations on new engines does exist, the leaders of North America’s largest truck makers seemed to disagree to the extent the trend is becoming a concern to the industry at large.

It is assumed that although pre-buying will initially increase truck sales, the market may halt in the fourth quarter and early next year when those older engines are no longer an option.

At the Mid-America Trucking show in Louisville, Ky., Kenworth’s general manager Ed Caudill, Nick Panza, general manager of Peterbilt, and Mack president Paul Vikner seemed to dismiss the notion that pre-buying by major fleet owners is occurring at wide-scale levels, adding that recent boosts in truck sales are not necessarily an indication of wide-scale pre-buying.

“Overwhelmingly, we are seeing our customers saying that pre-buying is not something that they’re going to pursue,” Mack president Paul Vikner said. “Most of them are going to be looking at ways to incorporate EPA ’02 into their fleets.”

However, some of North America’s largest and most vocal fleet owners have said publicly that they are either pre-buying, buying used, or sitting on existing equipment. Others have said they will give serious consideration to pre-buying as the ’02 deadline approaches closer. Many carries have strong reservations on the ’02 engines’ long-term performance, durability, cost, and, most importantly, fuel economy. While unveiling his company’s new EGR engine at the show, James Fancher, marketing manager for Volvo Trucks, told a group of truck journalists that it’s inevitable all the OE’s EGR engines will suffer fuel economy to some degree compared to existing engines. The new engines are also expected to add about $4000 to the price of a new truck.

Freightliner and International were instead a little more accommodating in accepting the pre-buying phenomenon is in fact real.

“Of course the ones that know the majority about it are the big fleets that have the relationships with the engine companies, and they understand everything that is going on, and there is an much information out there as there is information. So it’s fair to say that there is a perception out there,” Freightliner senior vice-president of sales Mark Lampert told Today’s Trucking. He was however quick to add that it’s still too early to tell if the increase in sales is as much a result of pre-buying as it is a boost in the economy.

International president Steve Keate went as far to take an aggressive stance on the trend.

“I’ve gone on the record in the past, in saying that pre-buying is a bad thing for us, a bad thing for the whole industry,” he said. “Although we’re working to help our customers understand what these new engines are all about so they can make an informed decision, we have locked in our production rates for the year. And quite frankly we’re not going to build any more trucks than our fair share beacuse we’re not interested in a short term gain at the expense of long-term viability of our business.”

It seems hard to imagine, however, that International would not answer the door if too many customers came knocking.