Strategic Approach
End users in other industries that have already lived through the transition to Tier 4 have taken a few different strategic approaches when developing their capital spending plans for related equipment:
- Go “Green” – Some end-user companies embraced the new Tier 4 product and wanted to position themselves as leaders in the "green"space. They got in line for the new products early, despite the higher prices, to lead the change towards cleaner air.
- Business as Usual – Other companies chose simply to pay the market price (even if it was forecasted to go up substantially) when their current captial plan called for new equipment or when their equipment simply reached the end of its useful life.
- Buy Used – Equipment manufactured prior to 2013 is “grandfathered-in” and does not need to be retrofitted to Tier 4 standards.
- Pre-Buy – Many companies decided to buy equipment in advance of the mandatory Tier 4 changeover (at lower prices) to defer the need for higher priced products as long as possible and to give them more time to adjust to the new market pricing.
Even though some Tier 4i models are still available, eventually, the only option for customers purchasing diesel powered products in the 18.6 to 55.2 kW (25 to 74 hp) range will be to buy a Tier 4-compliant product. Therefore, the purpose of learning about this issue now is to enable all customers to develop and implement an acquisition strategy that meets their specific needs.
As you review your own needs and options for capital spending on turf equipment, you may also want to consider researching how other end-user customers in other industries dealt with Tier 4 compliance.
- Other industries experienced significant pre-buy behaviours.
- Increased pre-buy demand created availability issues for lower priced equipment.
- Equipment manufacturers were unable to meet the unforecasted demand.
- Engine manufactures capacity became constrained as they converted existing manufacturing lines to the new Tier 4 product.
The past is not always a good predictor of the future. However, we encourage customers to plan early, so they can evaluate multiple options to maximise their ROI.
What can or should you do?
Act now to learn more and share what you know!
- Become knowledgeable about the EPA’s Tier 4 standards.
- Educate your leadership team and financial stakeholders about Tier 4 and the impact it will have on your equipment purchasing plans.
- Understand the availability for both existing and new Tier 4 technology solutions and how it may influence your options and decisions starting in 2013.
