Golf Inc - Summer 2012 - (Page 5)
Better for the environment, not your pocketbook
New EPA regulations could increase mower costs by as much as 20% in 2013
By CHRISTINA THOMAS New Environmental Protection Agency regulations designed to make diesel engines more environment friendly, should mean a 10 to 20 percent increase in the costs of turf mowers and other diesel equipment. Some predict a surge to buy the older, cheaper models before the end of the year. The new regulations will take effect on January 1. The EPA’s Tier IV regulations were passed in 2004, but turf equipment manufacturers were given until January to comply with the stricter standards — which must decrease exhaust emissions by more than 90 percent. It’s part of the EPA’s effort to improve air quality by reducing the amount of particulate matter and nitrogen oxide gases emitted by diesel-powered engines. But it comes with a cost. “We know that other industries that have transitioned to EPA Tier IV compliant products have seen significant cost and price increases,” said John McPhee, director of marketing, commercial equipment at Toro. McPhee said the rise in costs is due to requirements for new engine and exhaust systems, more sophisticated emissions controls technology and structural redesign. Toro, John Deere and RansomesJacobsen have all spent the last few years re-engineering their mowers and other diesel vehicles to be in compliance. Diesel trucks and other larger horse-powered engines have already had to comply. “In other industries, prices rose 15 to 20 percent,” said Bob VandenBoom, senior marketing manager at Toro. “We expect our prices to go up 10 to 15 percent.” The new regulations will affect all new products powered by 25 to 47 horse-power diesel engines. Equipment manufactured before 2013 will be grandfathered. Manufacturers are urging their customers to develop a strategy to prepare for the increased costs. Mark Ford, marketing manager at John Deere, and product line marketing manager Mike Koppen, said the company is encouraging customers to create an equipment replacement plan that stretches over a couple years. They said the newly regulated models will be phased in throughout 2013. John Deere has experienced a sales increase this year, but Ford said this is more likely due to an increase in confidence about the economy rather than operators buying up the lower-cost equipment before they are no longer available. But that doesn’t mean there couldn’t be a surge as the year winds down. “We are not the first industry that has had to meet these new diesel emission standards,” McPhee stated. “Many others have gone before us.” McPhee said other industries have experienced significant buying sprees preceding the new regulations because of the possible impact of price increases. Additionally, he said some industries’ demand has surpassed the engine manufacturers’ ability to supply pre-Tier IV engines. The industry has seen an improvement in sales activity. “The economy is much stronger than it was a few years ago, and people are buying and planning [to buy],” said Chris Schauerman, senior vice president at PNC Golf Finance. “There has been pent up demand from the prior two years when many courses held off on equipment purchases.”
Schauerman said the improved economy has opened the pocketbooks of many courses that realize they need to replace older, worn-down equipment. But buyers are far more cautious than they were prior to the recession. Ford, with John Deere, said the purchase cycle is much longer as courses do more research and involve more people in the purchase decision. Whereas in the past the superintendent may have handled the decision on his own, today the general manager is often involved.
Summer 2012 www.GolfIncMagazine.com 5
Table of Contents for the Digital Edition of Golf Inc - Summer 2012
Golf Inc - Summer 2012
Table of Contents
Hiring Right: The First Step Toward Great Customer Service
New EPA Regulations Will Increase Turf Equipment Costs
Britain’s Greenkeepers Association Makes Operational Improvements, CEO Says
What the Future of Golf Could Look Like
Textron Financial, Capmark Put Golf Portfolios Up for Sale
With Commercial Real Estate Confidences Up, Is Golf Close Behind?
The Evolution of Donald Trump
Tasmania’s Coming of Age
Largest Management Companies
Renovation of the Year
Bald Head’s Logistical Challenge
The State of Technology in the Golf Industry
Britney Spears as Golf Spokesperson?
Golf Inc - Summer 2012