Abstract
US diesel engine demand to slow after 2006 pre-buy
With growth reflecting an artificially high 2006 base year, US demand for
diesel engines and related aftermarket parts will increase 1.1 percent
annually through 2011 to $16.7 billion. Demand for parts and non-motor vehicle
engines will help offset lower demand for motor vehicle engines. Demand will
not match peak 2006 levels in the key heavy-duty truck diesel engine market,
which resulted from fleets buying trucks ahead of 2007 emissions regulation
changes. These changes will add both significant cost and uncertainty, since
first-year engines using new technologies may not be as robust in terms of
reliability and durability.
Although faring better than heavyduty truck engines, off-highway diesel
engines will likely experience a slowing of demand through 2011, as new Tier-4
emissions regulations phase in between 2008 and 2015. Particulate matter and
oxides of nitrogen emissions are mandated to be further reduced by about 90
percent, which will likely be achieved through the use of control technologies
similar to those required by the heavy-truck standards, such as advanced
exhaust gas after-treatment. The added expense and risk will impact
year-on-year demand for these engines, thereby distorting the market going
forward.
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