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Gearing up

January 1, 2005 By    

A push by Toyota’s Hino Motors to earn more of the U.S. commercial delivery truck business should provide a turbocharged, 260-horsepower propane engine suitable for use in bobtails, buses, medium-duty delivery vehicles and other class 7 applications by 2006.

 Bobtail Engines
Bobtail Engines

Currently, diesel powers 97 percent of the 67,000 class 7 vehicles sold domestically each year. There are about 28,000 bobtails in use with capacities ranging from 9,000 to 17,000 gallons; most are diesels.

Propane proponents have long lamented the lack of dependable OEM propane engines powerful enough to drive this industry’s bobtails and serve other commercial fleets.

Many retailers contend they want to run on the same fuel they are selling, but concerns about service with aftermarket products have pushed most back to diesels. Meanwhile, Ford, Chrysler and General Motors are no longer producing propane engines.

Enter Hino Trucks North America, a Toyota-owned OEM pushing an ambitious plan to build and market commercial delivery trucks in the United States – including a larger propane engine that will meet strict 2010 E.P.A. emission standards.

Texas Propane Technology Forum attendees checking out the Hino 338 bobtail exhibit included (left to right) James Cole of the Southwest Research Institute, Victor Carrillo of the Texas Railroad Commission, Dan Kelly of AFRED, and Al McFadden of CleanFuel USA.
Texas Propane Technology Forum attendees checking out the Hino 338 bobtail exhibit included (left to right) James Cole of the Southwest Research Institute, Victor Carrillo of the Texas Railroad Commission, Dan Kelly of AFRED, and Al McFadden of CleanFuel USA.

Hino, the No. 1 maker of medium- and heavy- duty trucks and buses in Japan, has said it plans to double the company’s 1 percent U.S. commercial truck market share in the coming year and to quintuple sales here in a few years.

In addition to outfitting a Hino Model 338 propane-powered bobtail and a line of medium-duty delivery trucks, it’s anticipated that this engine will be available for purchase to mount on other vehicles, according to Brian Feehan, managing director of engine fuel programs for the Propane Education & Research Council.

PERC last month invested $1.2 million in the project, it’s second-largest research and development grant ever.

“The funding is in place and the partners are in place,” says Feehan, noting that Hino officials approached the propane industry about the project. IMPCO Technologies is to develop the fuel systems; CleanFuel USA, Rush Enterprises and the Southwest Research Institute also are partners.

A popular exhibit at the Texas Propane Technology Forum last fall was the Hino 338 bobtail chassis that will be converted to propane to meet 2007 and 2010 emissions standards.
A popular exhibit at the Texas Propane Technology Forum last fall was the Hino 338 bobtail chassis that will be converted to propane to meet 2007 and 2010 emissions standards.

Once the new engine is fired up in prototype mode, several entities will provide year-long road tests. Ferrellgas will run Hino bobtails and diesels on similar customer routes to compare performance, while Northside Independent School District in Texas will carry students on a full-sized Blue Bird school bus. Additionally, Los Angeles County wants to install the engine in its street sweepers.

The engine also could fill the need to run stationary irrigation pumps on farms looking to get off dirty diesel, Feehan says.

Igniting interest

Bobtail manufacturers say they are intrigued by the initiative, although they’d first like to see it up and running to make sure it has the promised giddy up needed for delivery duty.

Hino Trucks Background
Hino Trucks Background

“It’s a great concept. It could be something we’d look into,” says Brian Amthor, marketing director for Amthor International. Adequate horsepower and torque would be key requirements to meet his customers’ needs, he notes.

“If Hino came up with a working engine, I think it would sell,” concurs Mike Pitts, vice president of sales for Mississippi Tank.

Pitts says most of his customers buy diesel, because today’s intricate computer-controlled engines have stalled efforts to convert diesels to propane. Independent propane marketers are especially desirous of propane-powered bobtails.

Project Overview
Project Overview

“They don’t like the image it sends when they’re driving around diesels while selling propane,” Pitts notes. “They say, ‘That doesn’t look good to our customers and it’s bad for our image.'”

Steve Bloomstrand, vice president of operations at Rocket Supply, likes what he’s heard about Hino’s added power.

“That would be more than sufficient for what we use,” he says. “We have customers who are truly dedicated to propane (vehicles). They want the torque, horsepower and to be able to use the fuel they sell; they’d like to have it (a propane-powered fleet) in their facility so they could fuel it up at night.”

Project Overview
Project Overview

Opportunity NOx

The Hino, based on the company’s JO8C CNG 8.0L platform, should be available for ordering this fall with delivery by 2006, according to Feehan, The units will be certified to comply with the U.S. Environmental Protection Agency’s 2004 standards.

By the fall of 2007, project partners are confident the engine will meet the 2010 EPA requirements (0.2g NOx) – a feature that could boost propane’s future as a fuel of choice for trucking fleets of all types.

“Nobody knows how a diesel truck is going to meet the 2010 standards, so that’s another market opportunity,” Feehan points out. “From our perspective, we see some real opportunity here.”

U.S. Truck Market Size - 2003
U.S. Truck Market Size – 2003

Hino officials are tight-lipped about key competitive issues, including the cost of the propane engine and the number of units it expects to sell. In fact, the lack of detailed cost and market data raised extensive debate among PERC board members voting to invest the industry’s research dollars in the project.

Feehan says some of that data will be required as the formal contract is finalized. PERC also will reserve the right to withdraw from the project at several check points if results don’t measure up to expectations.

A cost-benefit analysis conducted by the Texas Railroad Commission’s Alternative Fuels Research & Education Division projects the Hino engine could drive a 10 percent annual bobtail market penetration through 2009. That success rate would put about 4,000 new propane bobtails on the road by 2010.

AFRED’s study also notes that users of the new vehicle can save $535 per year by filling up with propane instead of diesel. The comparison is based on diesel costing $1.80 per gallon and wholesale propane selling for 96 cents per gallon, assuming each vehicle eats up 37,700 annual miles. Diesel engines net 7.54 miles per gallon; propane delivers 4.3 mpg.

By 2009, propane marketers buying Hino bobtails will have burned more than 35 million additional gallons of propane in their delivery units, according to projections.

AFRED also estimates that 200 Hino engine-equipped school buses will be bought each year, burning 2.6 million gallons of propane annually by 2009.

Sources close to the current project say this initiative is almost certain to stimulate propane’s place in the alternative fuel market.

“I’m sick and tired of us not having a vehicle and getting beat by CNG,” one executive laments. “Now is a good time for us to step in. It’s something the whole industry can capitalize upon. It’s a bad signal from us if we have a chance to use our own fuel and we don’t.”

Proponents also cite two spinoff benefits if Hino engine sales take off. More propane vehicles should push demand for much-needed refueling infrastructure, while any substantial success by their competitor could lure Ford and GM back to the propane marketplace.

“If you want to catch Coke’s attention, you buy Pepsi,” the executive observes.

Another executive close to the project expressed confidence in a burgeoning propane fleet marketplace driven by commercial truck users not currently running propane vehicles. “This is the catalyst to allow propane motor fuel to consolidate within the industry. It will allow propane to become the leading alternative.”

Contract provisions to provide a 24-hour roadside service program and cover parts and repairs intrigue propane industry officials who bemoan the lack of an adequate servicing infrastructure for past owners of propane bobtails.

“I like the idea of aftermarket support and training. This will be very meaningful for a fleet manager – all the pieces are in place,” the executive notes.

Pondering Penske

Hino, a builder of commercial trucks founded in Japan in 1942, has sold trucks in the United States since early 1984. Worldwide, it produces about 70,000 vehicles annually.

The American operation is owned by Hino Motors of Japan, the majority stockholder, and by Mitsui & Co. along with a stake held by PCP Holdings, a subsidiary of Penske Corp. Toyota holds controlling interest in Hino.

Hino has opened a new manufacturing facility in Long Beach, Calif. The company says its start-up staff of 50 people will grow as Hino ramps the plant to a targeted production level of 10,000 trucks per year by 2006.

The company also opened a new $30 million parts, logistics and corporate headquarters center in Ontario, Calif., and is building a parts distribution center in Arkansas that may add manufacturing capacity if Hino’s domestic sales grow.

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