Tier 4 Equipment’s Effect on 2016 Acquisition Plans

Tier 4 Equipment’s Effect on 2016 Acquisition Plans

December 18, 2015

Nearly all models in major machine categories have been updated with Tier 4-Final engines. Yet many fleet managers have hesitated to purchase the new equipment. Many fleets have Tier 3 machines with many hours of useful life available; others are cautious about investing in equipment when project backlogs are still light.

Still others, according to Construction Equipment's Annual Report & Forecast, are concerned about increased prices of machines equipped with the latest emission-reducing technologies.

The re-engineering and research-and-development costs associated with producing machines that meet EPA-mandated emissions standards must be recouped, so manufacturers haved increased prices for equipment with Tier 4-Final engines.

Fleet managers have responded to cost increases in three ways: They have or will boost equipment-acquisition budgets, they will reduce the number of machines they replace, or they will turn to alternative acquisition strategies such as rental or used-equipment purchases.

But purchase price isn’t the only concern, although it is the No. 1 issue. Maintenance of machines with emissions technologies also causes heartburn.

The population of Tier 4 equipment is small, so managers do not have historical data or actual experience with maintenance to know what to expect. Diesel exhaust fluid must be managed and integrated into field-maintenance procedures. Technicians must be trained. Diesel particulate filters must be properly regenerated and cleaned.

Only 10 percent of respondents are “generally prepared” for Tier 4 equipment. The accompanying charts show why the other 90 percent are not.