Cummins Introduces Longer 3 Year Warranty On 6.7 L Engines

Powerhouse engine manufacturer Cummins Inc. has made public this week that it is introducing a complete comprehensive three-year warranty for its famous B Series 6.7 L diesel engine.

The base level warranty covers the same comprehensive coverage for parts and labor on standard engine failures as the old warranty. It also covers some warrantable failures for the emissions after treatment systems. The warranty is unlimited miles but is only good in North America. In addition to the extended engine warranty, an additional towing and travel coverage has been increased from one to three years. The towing and travel coverage includes no deductible and consumables used in the repair will be billed at no charge. Customers can now purchase extended warranties up to 300,000 miles or 7 years if they choose at a much lower cost than before.

It makes sense for Cummins to offer additional warranty options for customers amid struggling revenue projections this year. The 6.7 L, first introduced in 2007, is one of Cummins most popular engines installed in many Dodge Ram and now Nissan Trucks. Cummins has been producing the 5.9 L and 6.7 L engines for many years now and is well versed in the inner workings of the duty cycles of these engines. The deep knowledge on how to repair these engines and more importantly how to perfect its manufacturing techniques has given the company confidence to offer extended warranties. The 6.7 L engines used to have issues with the emissions after-treatment DPF and SCR systems but those days seem to be long behind the company. Emissions treatment technology was essentially forced upon engine manufacturers by the EPA in the 1990s and really started its integration on over the road and off road engines starting around 2005.

Last year Cummins share price dropped 41% primarily due to a significant drop in the amount of orders from their biggest customer, PACCAR Inc. Truck maker, PACCAR, began making its own propriety MX engines for the North American market beginning in 2010. PACCAR invested over $1 billion dollars over ten years on the MX product line hoping to be completely independent of engine maker Cummins. In 2016 nearly 40% of all new PACCAR trucks (Kenworth and Peterbuilt) came equipped with an MX engine.

Furthermore, Cummins’ second biggest contract, Freightliner, is expected to decline by 10%-15% as they explore other engine options for their trucks. In addition to declines in domestic revenues for Cummins the international markets are much softer than they have been in past years for heavy equipment and over-the-road trucks. Overall, Cummins’ NAFTA Class 8 Group 2 (>10L) share should also decline below its projected “low 30%” range for 2016 according to Longbrow Research. Hopefully, the storied engine maker can turn things around in 2017.

 

Sources:

Http://www.fleetequipmentmag.com/author/feadminusr/. "Cummins Extends B6.7 Engine Warranty." Fleet Equipment Magazine. N.p., Nov. 2016. Web. 06 Dec. 2016.

Swanson, Jim. "Dealers Expect Cummins To Lose More Market Share This Year, New Data Shows." Benzinga. N.p., 26 Jan. 2016. Web. 06 Dec. 2016.