Caterpillar confirms EPA's pre-buy checkup

Caterpillar Inc. said EPA is in fact asking seven major truck-engine manufacturers if they have encouraged customers to pre-buy engines before October, when clean-air regulations are scheduled to take effect. According to The Chicago Tribune, an unnamed source at EPA said the diesel manufacturers, including Caterpillar Inc. and Cummins Inc., are prohibited from encouraging pre-buying under terms of a 1998 consent decree. Caterpillar said it has received a “208 request” from EPA collecting information on whether they have been encouraging pre-buy, a request authorized by the amended Clean Air Act and consent decrees. The company said all engine makers that signed decrees received identical letters. "We have not encouraged anyone to pre-buy," senior communications representative, corporate public affairs Carl. M. Volz told Fleet Owner magazine. Volz added that it is "EPA’s own data that caused or precipitated this pre-buy, (their reports on) things like the cost of EGR engines, the fuel economy degradation, (more frequent) oil changes, and the extreme heat causing corrosion problems." Lost in all of this, Volz said, is the fact that "we're losing all of the environmental goals we all support because of pre-buy. We propose recapturing the anticipated gains by postponing the requirements for one year and allowing engine makers to ‘pay back’ (the higher emissions levels) in the future” by meeting even lower levels than those scheduled to take effect on October 1. Encouraged or not, some OEMs have said that pre-buying is evident in the industry. International Truck & Engine Corp. today raised its Class 8 heavy truck sales projections by 12,000 units for a total estimate of 156,000 units to be sold this year, noting that such a sales increase would largely reflect fleets pre-buying trucks before new emissions standards go into effect. "The recent increase in industry orders for heavy trucks is being driven both by so called pre-buying in advance of the new emissions standards for big-bore engines and demand strengthened by the economy," International chairman & CEO John Horne said. Paccar Inc. said this month that the pre-buying of vehicles by fleets to side-step the upcoming rules helped increase its first quarter net income by 7%. "It appears that most of the increase in orders is due to pull-forward purchases, as fleets try to minimize the negative impact of more costly engines being introduced on October 1," Paccar CEO Mark C. Pigott said. "While this will likely have a favorable effect on the second and third quarters, the fourth quarter of 2002 could be unfavorably impacted as a result of the accelerated buying."

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