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Prospective buyers of new trucks face a dilemma — should they go down the Euro-4 or the Euro-5
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route? Steve E reports.
0 perators thinking of purchasing a new truck today are in something of a quandary. Should they opt for Euro-4 or Euro-5? Nor is it just a question of whether they prefer SCR or EGR, although at present no one is offering an EGR Euro-5 truck in the UK.The question is whether a Euro-5 truck will be worth significantly more than its Euro-4 counterpart in three to five years' time, or vice versa.
On the face of it. opting for Euro-5 early makes sense from the residual value Viewpoint —especially if you are willing to postpone your purchase until next October when the Reduced Pollution Certificate (RPC) will be reinstated.Worth an anticipated I:500 annually, it will be available to buyers of Euro-5 vehicles until the standard is made mandatory in 2009.
The October launch will coincide with the compulsory fitment of a NOx sensor to new Euro-4 and Euro-5 trucks which will reduce the power of the engine if an SCR truck's AdBlue tank is not topped up. EGR trucks will also be affected if their emissions exceed permitted NOx levels, In the view of Daf UK. marketing director Tony Pain, the RPC will drive up the value of a Euro-5 truck by il .00041,500 after three years compared with its Euro-4 counterpart."If it's an SCR vehicle then admittedly it will use more Ad Blue at Euro-5111M that will only cost an additional .E200 a year," he says.
MAN ERE sales and marketing director Dave Cussans disputes Pain's figure."The extra money you'll spend on AdBlue will more than wipe out any advantage brought about by the RPC,-he says. "You're talking about an additional 50% dose."
Roger McCarthy, Scania's LiK. sales director; adds:"Any Euro-5 vehicle purchased today using SCR and thus AdBlue will require a dosage rate double that of a Euro-4 vehicle:.
Fuel economy is unlikely to be an influencing factor in residual values. says Renault Trucks marketing direcn rr Bruce Allison.-A. Euro-5 truck won't use any more diesel than a Euro-4, and as far as the future used market is concerned you'll probably sell it more quickly as well as getting a bit more for it," he explains.
Greater outlay
However, an enhanced residual value has to be balanced against a higher front-end price. You pay anywhere from £600 to Elm) more for a Euro-5 truck when you buy it new. Over the next few years,increasing numbers of local authorities may decide to deny admission to their city centres to all but the most environmentally friendly trucks.That could give Euro-5 the edge,and ultimately drive up the prices of used trucks featuring the technology —but not if you look at the small print, argues McCarthy As far as London is concerned, the low-emission zone (LEZ) consultation document gives no indication that the requirements imposed will extend beyond Euro-4," he sa.ys."That is because Transport for London is basing its LEZ standard on particulate outputs only, which are the same for Euro-4 and Euro-5." Manufacturer views on the merits of Euro-4 as opposed to Euro-5 are, of • course, heavily influenced by which technology they have available. A vocal supporter of EG R. MAN ERE for example.will not have an EGR Ettm-5 truck on sale in Britain until 2009. ;Although the manufacturer has been marketing; an SCR Euro-5 solution in Germany to enable customers there to take advantage of local tax concessions, it has no plans to offer it , Scania has 12-litre 380bhp and 420bhp and 16-litre 500bhp engines available at Ettro-5 using SCR and will have EGR Euro-5 engines on sale on this side of the Channel from November.
Head to head
Interestingly,in the only direct comparison available. Clis last 1,000PointTest (CM 25 May 2006), the Euro-5 lveco and Scania used less AdBlue than the Euro-4Volvo and Mercedes-Benz under identical conditions.
Residual value specialist CAP can provide an objective view, and in its opinion the E.uro-4 and Euro-5 trucks now on sale will be won h roughly the same after three years.
While the owners of Euro-5 trucks on Continental work may find they enjoy toll concessions in certain European countries, these are likely to end when the standard becomes mandatory,says CAP.
The fact that the RPC advantage will be (at least partly) negated by SCR's extra AdBlue consumption at Euro-5 suggests that Euro-5 EGR trucks might fetch more after a few years in service than either Euro-5 SCR or any Euro-4 truck. However, they have yet to go on sale in Britain, and while used buyers prefer a less complicated solution — and AdBlue is an added complexity—much will depend on the view they take of EGR's fuel economy.
The contract-hire view
Contract-hire companies now writing agreements need to take a view on Euro-4/ Ettro-5 residuals in order to calculate the Monthly rate they charge their customers.
In the view of Artegy and Fraikin. Euro-5 trucks will command more money than their Euro-4 stablemates in four or five years' time, but the difference in residuals will not he massive. Fraikin does not believe it will have a huge impact on the rate that customers pay.
So where does all this leave customers who have bought late-registered Euro-3 trucks with analogue tachographs?
In three or four years' time operators will be much more familiar with digital tachographs, and that is likely to reduce the appeal of an analogue unit. From 2012 operators using Euro-3 vehicles in the LEZ will be penalised and that approach may be adopted by other councils in the country That said, they will not require AdBlue, and that could make them more appealing to export markets. Some used truck experts suggest they could be worth slightly more than SCR Euro-4 trucks, but about the same as EGR ones.