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Putting the brakes on sales



Published: Sun, August 12, 2007 @ 2:00 a.m.

The truck stops here:

Environmental friendly engines are not well-received.

By ANDREW GAUG

VINDICATOR STAFF WRITER

A sales boom has slowed for the tractor-trailer truck industry.

The problem stems from new Environmental Protection Agency standards limiting the amount of emissions from trucks.

“The government has taken 10 [percent] to 15 percent of our business,” said John Cerni, owner of Cerni Motors dealership in Austintown.

New engines designed to fit EPA standards haven’t been well-received by truck drivers for numerous reasons.

Carl Greenaway, general manager at Fyda Freightliner in Austintown, said a major problem is truck drivers’ reluctance to try something new.

He said there was a major loss of trust after the rushed release of a line of faulty engines in 2004.

“In 2004, we were using an unproved engine,” he said, “Now, no one’s willing to take a chance.”

Scott Adair, owner of Southwind Transportation, a trucking company in Austintown, agreed. “Nobody wants to be the guinea pigs with running new engines.”

Adair also said some of the new engines have had major problems.

“I would say the new engines that we started running had more problems than we had foreseen,” he said. “It’s more maintenance, more downtime.”

Hurts fuel economy

Charlie Cerni, sales manager at Cerni, said International has taken precautions to avoid problems that previous trucks have had with new motors. The new trucks have been tested for more than 6 million miles by 2,000 truck drivers, dealers and others.

The new engines are geared toward being friendly to the environment, but not the driver’s gas mileage.

“With the fuel economy, [trucks] lost about a gallon a mile,” Adair said,

Cerni said older trucks get about 6 to 9 miles per gallon, and Adair said the new engines get about 5 mpg.

“It really hurt the fuel economy,” Cerni said. “Now with loss of fuel economy and rising gas prices, the pinch is on.”

The pinch may also be felt by consumers. As fuel economy goes down and gas prices go up, so will the prices of the products trucks transport, Greenaway said.

One of the main concerns for truck drivers is how much the new trucks cost.

Although International Truck and Engine Corp. spent $300 million on developing its new ProStar line, the company plans to keep prices close to their previous models, John Cerni said.

“There will be no significant cost increase to customers,” he said.

Adair said, however, that he has found a significant increase. He said the new engine has added between $4,000 and $6,000 to the price of truck tractors, which cost more than $100,000.

Costs add up

Don Constantini, chief executive of Falcon Transport,a trucking company in Austintown, said it’s more than just the cost of the engine that drives up prices.

“It reduced the miles per gallon. So the engine not only costs you more money, it costs more money to operate,” he said.

Some trucking companies, such as Falcon, expected to be dissatisfied with the new engines and made efforts to avoid them.

Constantini said he bought a large number of trucks without the new engine before the EPA standards went into effect at the start of the year.

“We went into quite a major pre-buying strategy in mid-’05 and ’06,” he said.

Constantini said many businesses did the same thing, which caused a sales boom for truck dealers last year.

“Everybody pre-bought,” he said, “It was a scary good year.”

Used trucks selling

Used-truck sales have also skyrocketed since trucks with the new engine have been released, Greenaway said.

“It drove up the used-truck market,” he said. “People that are trading in are getting more for their used truck.”

Both International and Freightliner have introduced new lines of trucks that have improved aerodynamics, which is designed to offset the loss of fuel economy in the new engines.

International said the new designs save 4 percent to 5 percent in gas costs annually.

The truck industry may be experiencing a slowdown in sales but some are optimistic about the future.

“All sales going through quarters three and four will pick up,” Greenaway said. “I don’t think we’ll have as big of a lull.”

“It’s going to take a while to recover,” Charlie Cerni said. “But people need trucks. Trucks wear out.”

Greenaway said the new standards will be something the truck industry will have to get used to.

“We have no choice; we have to make it,” he said.

agaug@vindy.com


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