Prodded by the ongoing exchange of views in the comments, we thought we'd leave NAV alone for a moment, and have a look at this nest of vipers. Euro VI is three years away, but already there are mutterings afoot. Word reaches us of a sustained and joint effort on the part of the European truck manufacturers to delay the implementation of the 0.4 g/kWh by at least a couple of years.
Why should this be? Four of the European players will be possessed of a Euro VI-compliant engine as of January 1st 2010. Volvo, Renault, Mercedes-Benz and DAF need only to reach across the Atlantic and pocket a few EPA 10 compliant engines from their respective American cousins. EPA 10 mandates a 0.272 g/hp-hr NOx, 0.01 g/hp-hr PM output, a requirement more stringent than that demanded by the EU, and, by the time that Euro VI is due to come into force, these engines will be old news in the New World. There is now universal agreement in Europe that Euro VI - for Heavy Duty applications - will be met with a combination of moderate EGR and a possibly slightly reduced dose of SCR, and this mirrors the approach adopted by all but one of the American suppliers. The one - Navistar - is playing a numbers game with EPA credits and is getting itself into a well-documented muddle in the process. It is arguing for EGR alone and hoping for a magic bullet to arrive by the time its credit bank is depleted. This is an approach redolent of planting Magic Beans and hoping, and is entirely worthy of our dismissal.
The devil here exists not in the engineering detail; that is now a done deal, and Euro VI exists. EPA 10 vehicles are now being delivered as production models in the US - albeit in small numbers - and the engineering work has been done. For the Europeans, it should be a simple case of strapping the developed, tested and certified compliant engine between the chassis rails and banking the money. Cue cheers from the multitude and a search for another problem to confront.
It isn't go to be that simple. We're well used to the idea of legislative demand bumping heads with operational requirements; this will no doubt continue at Euro VI, but, first, the truck manufacturers have to get over the problem of legislative demands banging heads with other legislative demands.
At Euro VI, the problem is quite a simple one. EU regulations are not applied universally, but we can propose a more-or-less standard compliant articulated truck specification as being no more than four metres high, no more than 16.5 metres long and a GVW of somewhere between 40 and 44 tonnes.
We'll park the weight issue on one side for a moment, and consider instead the likely physical size of a Euro VI compliant engine. Whilst the jury is out in terms of the physical dimensions of the 2013-compliant units - Detroit Diesel's DD13 is bigger only as a result of its after-treatment system when compared across EPA 07 and 2010 variants - but one thing that does seem a racing certainty is that, if you add EGR, you add heat. And, if you add heat, you need to add cooling. 2013 - compliant engines will therefore need more space, and, probably, will prove to show a net weight gain over the Euro V models.
In North America, there is some room to manoeuvre here, but, given the height and length constraints mandated by the EU, European designers do not have this luxury. Today's expectation is for a flat floor within the four metre height limit, and, given that we hear talk of a eight centimetre rise in some US truck model floor heights as a result of EPA 10, this will prove to be a challenge. If you can't go upwards, you have to go backwards, and this impacts directly upon the 16.5 metre length limit.
Not our problem. Until, that is, we have to pay for this. Euro VI may have been engineered using the global scale and platform ethos, and those manufacturers thus enabled will have had to pay out less per unit for the driveline. Packaging the same will be a European - and Latin American affair. Meaning that the development costs incurred as a result of - we think - designing a new cab from the rails upwards, the possible introduction of Independent Front Suspension and the use of composite materials to mitigate the weight gain - will have to amortized over a far smaller production volume.
This can mean but one thing. The accepted on-cost within North America for the shift from EPA 07 to EPA 10 is around $9000. We reckon that the on-cost in Europe at Euro VI is going to be an order of magnitude greater than this. There is a lot of work to be done, and, at present, precious little in the R&D fund with which to do it. The end user will end up paying, so welcome to the largest pre-buy yet witnessed in Europe.
As of now, we are in a downturn. The replacement cycle has a certain amount of latitude, but it is not endless, and we can expect the truck market to begin to liven up probably during Q1/2 2010. That places the next round of replacements some time during 2013, the year in which Euro VI is supposed to appear.
The industry needs to think this one through very carefully. Possession of a late model Euro V-compliant truck in September 2013 would seem to be a very good idea. However, attempting to ride this interrupted cycle out is going to be a challenge. In an ideal world, it would be a case of buy now, replace Q4 2012 at Euro V and hope that the next replacement would be priced to reflect the paid off R&D cost of Euro VI. But buying now is not an appealing option.
This has the makings of a European-wide problem for both supplier and customer. Truck demand has to soar during 2012, and will probably plummet during 2013. Cycles will have to be managed very carefully: and, for the first time, it would seem that this isn't merely a manufacturing problem, but also one that will have a very marked impact upon the end user.