Released on = April 21, 2007, 12:06 am

Press Release Author = Bharat Book Bureau

Industry = Marketing

Press Release Summary = 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.

Press Release Body =
Diesel Engines industry forecasts to 2011 & 2016

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.

Heavy trucks to remain largest diesel engine market

Heavy-duty trucks will remain the largest overall market for diesel engines, despite
the decline projected for this segment through 2011. Light-duty trucks will continue
to be the second-largest motor vehicle market and experience rapid growth, with the
other motor vehicle market -- which includes specialty vehicles -- posting strong
gains as well. The current renewed interest in fuel costs has caused more consumers
to consider light vehicle diesels. The modern diesel now accounts for fully half of
all car sales in Western Europe and is increasingly being considered for US use.
Diesel demand in the passenger car market -- long dormant in the US market -- is
expected to be strong, and to expand rapidly from a very small base. These new
engines offer significantly improved performance and less noise, vibration and
harshness compared to former engines used in the US market, which should boost
consumer interest. Additionally, technological innovations, many of which will be
prompted by federally mandated emissions control regulations, will spur demand for
new, cleanerburning diesel engines and components at both the original equipment
manufacturing and aftermarket levels in the motor vehicle and off-highway segments.

Study coverage

Diesel Engines, a new Freedonia industry study, is priced at $4400. It presents
historical demand data for 1996, 2001 and 2006 as well as forecasts to 2011 and 2016
by diesel engine product (e.g., motor vehicle, non-motor vehicle), material, and
market (e.g., trucks, buses, cars, off-highway). The study also considers market
environment factors, reviews technology, evaluates market share and profiles 35
industry competitors including Caterpillar, Cummins, DaimlerChrysler, Delphi,
Navistar and Volvo.

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