BELLEVUE, Wash. — Cummins’ six and eight liter diesel engines will soon be the exclusive spec for Peterbilt and Kenworth medium-duty conventional trucks starting Jan. 1, 2007.

That means Caterpillar engines will be dropped from the medium-duty product line, although Cat will still be available on class 8 vehicles, stated Kenworth and Pete’s parent company Paccar.

Although the engines will be built by Cummins, they will be badged as Paccar engines, effectively giving the truckmaker its own label and a more vertically branded powertrain. Cummins also supplies 4- and six-liter mid-range diesels to Paccar-owned European truck-maker DAF under a similar agreement. Those engines are branded ‘Paccar’.

Cummins 6-8 liter engines is what you’ll find under the
hood of a Pete medium-duty after Jan. 1, ’07

Paccar President Tom Plimpton said in a statement the new deal would help the company better compete with vertically integrated rivals, which have their own proprietary medium-duty engines. Furthermore, “the agreement will significantly reduce the cost of homologating multiple 2007 EPA-compliant engines in our chassis,” he said.

Some analysts predict the move opens the door for Paccar to market its own engine for the third — and most stringent — round of emission regulations in 2010. Earlier this year, Paccar CEO Mark Pigott didn’t rule out the possibility of the company’s own private label in the long-term.

It’s known that Paccar is developing an existing DAF heavy-duty engine — the 12.9-liter Paccar-branded MX — for possible use in North America. That engine complies with current Euro 4 and Euro 5 emissions regulations by way of selective catalytic reduction (SCR), a technology likely to be used in North America in 2010.

The transportation equipment division of New York-based investment firm Bear Stearns suggests the decision also positions Paccar to capture additional engine aftermarket parts business.

“We also believe a Paccar-branded engine would increase the likelihood of capturing additional repair-warranty work,” the firm suggested. “Most importantly, though, the deal allows Paccar to build its own engine brand in North America for what appears to be little capital investment or technical risk.”

Jason Phelps of Caterpillar admits the company is disappointed with the decision, but points out that the change represents a relatively small volume of engines and there are still other OEMs that offer Cat’s medium duty products.

Meanwhile, Caterpillar still values its strong relationship with Paccar. “They still remain our single largest engine customer. But we recognize that Paccar felt it was important to have a medium-duty engine to call its own,” Phelps told TodaysTrucking.com.

As it did to meet the 2002 EPA emission regulations, Cat set itself apart from other major engine makers for the 2007 EPA mandate by continuing with its proprietary ACERT technology rather than the cooled EGR used by everyone else.

Phelps said the Paccar/Cummins move is completely independent of ’07 emission control issues.

“We don’t believe this is related to ACERT technology at all. In fact, we think our ’07 solution is extremely strong — especially in the midrange market. We believe that Paccar simply wanted a Paccar-branded engine and Cummins was willing to offer that to them,” he said.

Joe Loughrey, Cummins president and chief operating officer, noted the relationship between the engine maker and truck manufacturer has come full circle. “Cummins was the first diesel engine installed in a Kenworth in 1933 and this agreement continues the legacy of innovation and market leadership between the two companies,” he said.