Demand shortfall
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Some operators are also confident that the transition from Euro-5 to Euro-6 could present an opportunity to cash in on the expected shortfall in demand. One company said it would speed up its programme of vehicle refleeting in the run-up to the deadline, bringing on board as many new Euro-5 vehicles as possible, cashing in on a buoyant used market for its older Euro-5 vehicles, while refreshing its entire fleet with late Euro-5 models. Then, if an incentive for the early uptake of Euro-6 were to be forthcoming, they would be prepared to offload their new late Euro-5 vehicles to firms unable to afford, or less willing to embrace, the more expensive Euro-6 trucks.
For many of the operators CM spoke to, the decision to adopt Euro-6 will hinge upon the availability of incentives. We understand that the government will announce some sort of incentive for early adopters in the coming months. However, it will almost certainly fall considerably short of the expected price hike.
Higher capital costs will also reduce the buying power of the average operator, many of whom said they will look to stock up on Euro-5 trucks simply because they anticipate not being able to afford Euro-6 vehicles. Operators also voiced concerns to CM over the payload implications of the heavier Euro-6 technology, which will reduce productivity while increasing operational costs.
Latest figures from the Society of Motor Manufacturers and Traders (SMMT) show that truck sales are increasing, up 54.9% in April, and, as work returns to the industry, capacity will continue to increase. The fear among many hauliers is that a resurgence in rates and work will arrive too late to capitalise on Euro-5 vehicles, and they will be forced to invest in Euro-6 at a time when cashflow will still be critical.