Summary
The referenced article states that the Caterpillar(NYSE:CAT) 15-Liter engine will be rebranded MaxxForce for 2010 - and offered along side the MAN-partnered 11 & 13 Liter models. This is good news for Caterpillar and smart for Navistar - and not so good news for Cummins. The correction is in the first sentence of the 1/12/09 analysis by the same title and was intended to portray “no” SCR instead of “all.”
Analysis
Navistar’s no Selective Catalyst Reduction (SCR) approach is continuing by extending the life of the Cat C-15 in the US - but as a private brand. This makes sense for Navistar and not a real costly one to implement - but with a potentially very good short-term payback and time to integrate the option for the future. The C-15 engine is currently engineered into the Navistar applications - and emission credits will be utilized as with the other models offered in 2010.
In June of 2008, we wrote in these missives that “Cat will not totally exit the on-highway market as some thought, but will only be offered in a different form in Navistar’s.” We knew that the 15-Liter Cat engine would continued to be offered, but in new Cat-branded models for the overseas markets. With Cummins having pulled their 15-Liter EGR 2010 model (8/08 GLG article) and not acquiesced to arm-twisting by Navistar to reconsider, many expected that a 15-Liter Cat option would be offered - but not this quickly.
As a part of the trend in moving to integrated vehicle-engine systems and smaller displacement engines, many expect the 13-Liter versus 15-Liter mix to move toward each other. In the mean time, there are many traditional big bore and Caterpillar loyalists that will applaud this move. Lower fuel prices have taken attention temporarily away from the 13-Liter fuel mileage savings sales point.
The Navistar ProStar now will have it’s 15-Liter option continuing, but with Cummins’ big market share disappearing. There is also expected to be some pull from some of Paccar(NAS:PCAR) Peterbilt / Kenworth and Daimler(FRA:DAI) Western Star sales to the Navistar LoneStar in the premium truck segment - but this is a lesser issue.
The concern still in the marketplace is how / when Navistar will implement their SCR products that were previously thought to be coming in 2013. But that really is not that much of an issue today, as a bigger problem is new vehicle sales - any sales! It makes sense to keep some of the products out that people are familiar with - and the ‘07 Cat C-15’s currently in service today are doing OK. Cummins is definitely the loser in this proposition.
