Predominantly confined to commercial use, diesel-powered zero-turn radius (ZTR) mowers have represented about 5% of the total ZTR market in each of the past five years. But that could change when the Environmental Protection Agency’s final Tier 4 emissions standard (Tier 4F) for 25 to 74 hp diesel engines takes effect in 2013. The standard requires emissions of particulate matter (PM) and nitrogen oxides (NOx) be reduced by a further 90%.
Whereas previous emissions reduction solutions were focused on the engine alone, the technology required to achieve Tier 4F standards in NOx and PM impacts the entire machine, from air intake to post-exhaust. Recent conversations Power Products Marketing had with four engine suppliers, seven original equipment manufacturers, enlightened retailers and industry observers indicate the already relatively high price of diesel-powered equipment in the 25 to 74 hp category is sure to be exacerbated by the Tier 4F standard and will force manufacturers to redesign and retool their product lines at a cost so severe it will undoubtedly result in even higher end prices for the consumer.
So what are suppliers doing/going to do to prepare their 25 to 74 hp diesel-powered mowers and compact tractors for Tier 4F? Can engine suppliers offer a competitively priced powerplant? Will OEMs continue to carry a selection of diesel products despite skyrocketing costs? How do dealers plan to handle what may be a drastic change in the market? How will consumers respond?
The conversations PPM had with engine suppliers, OEMs, industry observers and retailers at the close of 2011 suggest the forthcoming Tier 4F standard could be a real game-changer for the market, but also revealed confusing testimony regarding the current state of preparation for the standard’s implementation.
A surprising number of OEM representatives charged with working alongside engine suppliers said they still have no concrete knowledge of what their engine supplier plans to offer, and most said they will make a decision on the future of their diesel-powered line-up once they are presented with final options from their suppliers.
Engine suppliers PPM talked with all said they are working on their Tier 4F compliant engine offerings but declined to go into specifics regarding their powerplant(s). Those suppliers that have shown prototypes were equally reticent to discuss the communications they have been having with OEM customers.
But design implementation between OEM and engine supplier is in fact already underway, according to our industry observers, who said they believe OEMs with current diesel models to sell don’t want consumers focused on the future and thus won’t reveal their product plans for Tier 4F.
This may explain the lack of subject knowledge retailers displayed in communications with PPM. Incredibly, more than half of the 115 retailers surveyed had little to no knowledge of Tier 4F requirements as pertaining to the 25 to 74hp turf equipment market.
MANUFACTURERS
As mentioned earlier, PPM’s conversations with OEMs revealed that many of the brands, as of the fourth quarter of fiscal 2011, they were still undecided as to the fate of their diesel-powered 25 to 74 hp offerings in 2013. Most of those PPM talked with said they would make a decision on the future of their diesel-powered line-up once they are presented with options from their engine suppliers. The most important considerations, the OEMs said, concern engine cost, size and output.
A couple of the OEMs surveyed have produced websites to help explain the Tier 4 issue to customers, but much of those marketing materials tend to explain the current Tier 4 interim standards rather than what can be expected for Tier 4F and and what the company is doing to prepare for that standard.
It is important to note that the EPA regulates the transition from one tier to the next at the engine manufacturer level. As previous tier engines (and equipment containing those engines) are depleted from the supply chain, the new tier product will be released. All turf equipment manufacturers will have to transition to Tier 4F compliant product, but each equipment manufacturer’s launch date of the new tier will depend on conversion schedules and the use of a voluntary “Transition Program for Equipment Manufacturers” (TPEM) – aka engine “flex” credits.
ENGINE SUPPLIERS
It comes as no surprise that engine suppliers are staying largely mum about their R&D processes and business strategies in relation to Tier 4F. However, according to what PPM learned in its research, it is somewhat surprising that engine suppliers have also largely declined to keep customer OEMs informed.
A representative example can be found in an answer to the question, ‘What are you doing to meet the upcoming Tier 4F standards for your engines?’
“The exact engineering and design specifications have not yet been finalized at this time,” a representative of one significant diesel engine supplier told PPM in late 2011.
Of the companies PPM talked with, only three have shown at least one prototype engine within the 25 to 74 hp range, giving the industry a miniscule peek at the technology they hope to use in attaining Tier 4F compliance.
RETAILERS
While retailers are often thought to be the most educated source to help consumers understand current regulations and those that may be on the horizon, PPM’s survey of 115 dealers found an incredible 42% of the dealer representatives could not recall the Tier 4F issue while 38% said they had some knowledge of Tier 4F.
The remaining 20% of dealers surveyed deflected Tier 4-related communications to the OEM.
INDUSTRY OBSERVER
Intrigued by the apparent lack of communication between engine suppliers and OEMs, PPM talked with a longtime diesel industry observer unaffiliated with any one company for his view of the Tier 4F issue as it pertains to the turf market.
“I’m sure all of the engine suppliers know what they are doing for Tier 4 Final,” the diesel industry specialist told PPM. “It’s too late in the game to still be wondering what they’re going to do. They are all global companies and they understand what it takes. However, we’re still in the Tier 4 Interim stage, and so they have engines to sell and don’t want to get people too focused on what’s ahead. Plus, these engines are going to be more expensive and nobody wants to be the first to share that bad news.
“What most of the manufacturers have done is told their customers that the Tier 4 pathway they’ve chosen is basically going to allow it to be a drop-in solution from Tier 4 Interim.
“So I think the engine manufacturers have a pretty good idea and I think the OEMs probably have a pretty good idea (of what they plan to do). I think it’s the people who buy the machines that don’t know what’s coming.
“(Consumers) may have heard machines are going to be more expensive, but I think there is going to be a lot of sticker shock. You can warn people and warn people, but it doesn’t do much until they actually see the price. And, at that point, I think it’s going to cause a lot of jaws to drop. It’s inevitable.”
Guido Ebert has served as a powersports industry press representative, speaker, analyst and consultant for businesses in the U.S., Europe and Asia. A former editor at two trade publications serving the U.S. powersports industry, he now serves as a consultant working with Power Products Marketing, a market research firm that provides detailed market share data and research services to the global power equipment industry. Power Products Marketing is at 7525 Mitchell Road, Suite 203, Minneapolis, MN 55344. Phone: (952) 893-6870.
