A "Diamond Renewed" ProStar displayed at Navistar's Lisle, IL, HQ.
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Navistar launches “Diamond Renewed” used truck program

July 28, 2014

As part of larger strategy to help rebuild its U.S. heavy truck market share, Navistar is launching a new used truck refurbishment program dubbed “Diamond Renewed” for 2010 model or newer International units equipped with the company’s MaxxForce exhaust gas recirculation (EGR) engines.

David Gerrard, Navistar’s senior VP of distribution, explained in an interview with reporters last week that the “Diamond Renewed” program seeks to capitalize on demand for late model, low mileage used trucks that is expected to only increase as freight distribution patterns are expected to undergo a major shift over the next two years towards the Eastern seaboard.

“Our customers are operating on very tight lines,” Gerrard said, who himself spent a long career in the LTL segment of the industry before joining a Chicago-based Navistar dealer for 5 years and then moving over to the OEM’s corporate team.

“It used to be that the standard used [Class 8] truck model was 7 to 8 years old and cost between $25,000 and $40,000,” he pointed out. “Now that [Class 8] truck is 3 to 4 years old and costs $45,000 to $65,000. Yet that is still significantly cheaper than a brand new one.”

The upshot of the “Diamond Renewed” program, then, is to create what Gerrard referred to as a “sweet spot” for used trucks; Class 8 models that costs $50,000 less than a new unit yet come with enhanced options in order to better support vehicle uptime. In short, he said the program aims to provide used truck customers with a “new truck experience.”

Navistar’s effort in the used truck market is dovetailed with continued strong demand, as data tracked by ACT Research Co. indicates that the volume of used Class 8 trucks sold in June rose 10% above May’s volume.

“June’s performance was a little counterintuitive, given that sales usually slow in the summer months,” noted Steve Tam, ACT’s VP- commercial vehicle sector, in a statement.

“While one month does not make a trend, it confirms that demand in the used truck market remains strong,” he said. “Meanwhile, the average selling price of total reported Class 8 trucks sold in June slipped for the second month in 2014, to a record $47,345. Despite the short-term decline, our expectation is for price appreciation of up to 10% for 2014.”

In terms of the particulars for Navistar’s new “Diamond Renewed” program, only model year 2010 or newer International ProStar, TranStar and LoneStar models powered by MaxxForce EGR engines under 400,000 miles and up to 450 hp are accepted.

Gerrard noted that in some cases Navistar is "de-rating" engines coming into the program with higher hp settings as that reduces EGR related issues. "We've foud over the last few years in our experience with EGR that higher horsepower ratings create a lot of issues," he said. "So dropping into the 430 to 450 hp range creates less performance issues related to EGR."

Following a 180-point vehicle and engine inspection process, eligible used trucks are then refurbished at Navistar’s Used Equipment Reconditioning Center (UERC) in Indianapolis, with refurbishment working including: Cleaning or replacing diesel particulate filters and diesel oxidation catalysts, EGR calibration software updates, checking and repairing brake systems, conducting major body repair, painting frame rails and more. To date, the company said it has reconditioned 1,200 units to its “Diamond Renewed” standards.

Next, Navistar will provide what it calls its “System1 Confidence” OEM factory-backed warranty coverage for up to two years, 200,000 miles; coverage that includes EGR components, Gerrard stressed.

Finally, the OEM said “Diamond Renewed” reconditioned trucks with its OnCommand Connection monitoring system, providing a remote diagnostics portal so customers can access real-time fault codes, truck and dealer locations, vehicle health reports and fault code action plans.

Gerrard added that Navistar plans to sell its “Diamond Renewed” trucks through both its 15 International Used Truck Centers nationwide as well as through its dealer network. "At the end of the day we're trying to build on brand loyalty with this program; supporting the second and third buyer of our trucks in the market," he explained.

Bill Kozek, Navistar’s president-North American trucks & parts, added on the call that the new “Diamond Renewed” program aims to provide the same two major strategic benefits the OEM seeks to beef up for its new trucks as well: more vehicle uptime and lower cost of ownership.

“It’s all about developing products to fill in our gaps, be a leaner low-cost manufacturer, all while delivering lower cost of ownership to our customers,” he told reporters. “It’s an exciting time at Navistar but we still have hard work to do.”

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