Engine fireworks

Never in my five years of seeking the advice of the Truck Blue Book Advisory Council could I have imagined the fireworks created when I polled them on heavy-duty engine values just prior to the Truck Blue Book Conference. My goal was to review our engine valuation table and establish a basis for a discussion at the annual Advisory dinner held at the conference. This discussion would then lead to a

Never in my five years of seeking the advice of the Truck Blue Book Advisory Council could I have imagined the fireworks created when I polled them on heavy-duty engine values just prior to the Truck Blue Book Conference.

My goal was to review our engine valuation table and establish a basis for a discussion at the annual Advisory dinner held at the conference. This discussion would then lead to a more detailed and in-depth review of engine values at the Blue Book Workshop in the fall.

I received many emails from people who felt very strongly about the issue — or at least from those who had or were about to receive used trades with a particular engine make, model and/or horsepower, which meant they didn't want to see a negative impact on used values.

With so much unexpected “enthusiasm” over my request to review engine values, I decided it might be a good idea to take another look at what goes into determining the value of an engine on a used truck. Is it brand name? Horsepower? Liter displacement? Torque?

As I reviewed the comments, thought about my own experience selling trucks, and looked at the current Blue Book engine valuation table, it became apparent that engine values were based at least in part on perception.

Some of the negative perceptions seemed to stem from unfamiliarity with certain engine brands. But as truck manufacturers become more vertically integrated, it seems that negative reactions are directed at truck OEMs rather than the performance of a particular engine itself.

In creating a guide to component values, we at the Truck Blue Book try to compare data on OEM-specific engines with those of independent engine manufacturers placed in the same chassis. This is becoming increasingly difficult, however, as truck OEMs are reducing, if not outright eliminating, independent engine manufacturers in certain models of trucks.

The comparison valuation argument is a valid assertion and a typical tactic used by truck manufacturers that produce their own engines. The idea is to identify a benchmark engine. Although your engine may not be exactly the same — usually because of a smaller displacement — its comparative used value is the same.

These comparisons often do hold true, but only to certain horsepower breaks. At some point a larger displacement will bring more value on the used truck market. More power, albeit often unnecessary and in fact a detriment to fuel economy, simply equals more value.

The marriage of perception and comparison in used values is brand loyalty, i.e., the “I'm a such-and-such man.” This results in an increase in the used value of a specific engine maker's product in a specific OEM's chassis. There are some valid and very strong examples of this in the marketplace. No doubt this is one of the goals of vertical integration.

Unsurprisingly, vertical integration took another step in March at the Mid-America Trucking Show when International Truck and Engine Corp. announced plans to introduce a big bore engine developed by MAN for Class 8 applications. In addition, there is speculation in the marketplace that Paccar will be using a DAF engine in the U.S. market in the coming years.

It seems to me that in 10 or 15 years, the move to engine vertical integration could make it easier to value used trucks. Assigning a beginning used value to a truck will be very similar to what is done now for passenger cars, since the vehicle will be seen as a complete unit, rather than a number of independent components.

People don't usually walk into a used car dealership with questions about who makes the engine in the car they're interested in. Rather, they're concerned about the displacement and horsepower necessary to meet their needs. Until that day the used truck market will continue to sort through the offerings from independent and truck OEM engine manufactures. The Truck Blue Book will wade into the same territory, analyzing sales data, polling its Advisory Council, and seeking to understand the flow of values from engines.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish