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At what point does saving money become a project?

We all want to save money. Sure, it is human nature to spend the least, but get the most. However, there is the old idiom about being “Penny wise, but Pound foolish”, often incorrectly attributed to Benjamin Franklin, that often applies when comparing options.

We once had a suspiciously large parts order from a new, unknown customer. When the parts department received the order, they were perplexed: When did we sell an engine to these guys?

They combed through our accounts history and found nothing. What was going on?

It turns out that the customer had been given a GM engine block on the aftermarket (an old GM truck engine) and was trying to marinize it himself to use it on his boat. There are a number of different reasons why this is not a good idea for the average home mechanic, no matter how experienced or no matter how good his mechanical aptitude:

  • Most workshops lack the facilities for proper marinization.
  • You generally cannot use automotive parts in a marine engine, due to corrosion issues.
  • Marinization is a highly technical process. Without experience, the process can quickly become complicated and expensive.
  • Engines perform differently on the water than on land. The power and torque curves are completely different, and on an electronic engine, significant software knowledge is required.
  • Modern emissions requirements are tricky. In some locations, operating a vessel without certified emissions is illegal. It is very difficult to meet emissions requirements without the proper testing facilities.

<<AND>>

Most of all….

Marinediesel, as a manufacturer, has certain economies of scale when purchasing components. Quite simply, when you buy thousands of injectors, you pay much less than when you are buying two. Additionally, though it really isn’t a secret, most manufacturers make most of their profit from spare parts and service, rather than from the sale of the engine. That is why there is usually a big difference in markup on spares, but very little difference in price between similar engines (ie. Volvo Penta D6 vs Marinediesel VGT 400).

In the end, he was a little shocked that refurbishing his old engine would end up costing almost as much as a new engine. We finally convinced him that he would spend so much time and money that he really would save very little in the end, and most likely end up spending more. A project, indeed…

Equip a Fleet and Save Money

Marinediesel are seldom the cheapest engines in our class in the market. Indeed, we usually are priced somewhere in the middle: Not the cheapest, and not the most expensive, either. We do, however, feel that we give our customers much more value for their money, due to our technical advantages:

  1. Highest power to weight ratio: More power for the same money.
  2. Longest life cycle: Our competition cannot even come close.
  3. Lowest noise and vibration: The Laws of Physics mean that we will be quieter, with less vibration than any of our inline six cylinder competition.
  4. Remote diagnostic capability: Our technicians can diagnose your engine, anywhere in the world from our factory in Sweden.
  5. Customized performance: Go ahead. Ask Yanmar to customize an engine and get back to us on that.

These advantages make a solid case for Marinediesel well above any minor price differentials. However, we ask you to take a look at the web sites of any diesel engine manufacturers.

How many list prices online?

None.

There are very good reasons for this.

  1. There is nearly always a distributor involved for all but the most customized engine (like racing engines, which are manufactured annually in the dozens, rather than thousands or tens of thousands). Distributor involvement is an absolute necessity from a service perspective and for spare parts.
  2. VERY few people simply purchase a bobtail engine. Most engines require a certain amount of ancillary equipment in order to  be installed. Simply comparing bobtail prices is inaccurate and pretty much useless.
  3. Volume. It costs less to supply 100 engines than two engines.

This last point is pretty important. When you equip a fleet of vehicles with a specific engine, it is normally much cheaper than simply equipping one or two vessels. It costs Marinediesel, as the manufacturer, less to make the engines, and we pass those savings on to our customer. This is why bulk purchases are usually much cheaper on a quantity basis. It really is not much different than when one buys food at the supermarket. Big, family sizes, of products are usually cheaper than individual portion sizes.

On your next project, contact your local Marinediesel distributor for a quote. Our distributors often have a great deal of price flexibility and we will work with them to provide you the highest performance possible at the lowest price possible.

 

“If it sounds too good to be true, it probably is…”

Recently, it was brought to our attention by a customer that he “found a VGT engine for sale in the USA, at about half the price we were charging”. This got our attention for a number of reasons. We are long term licensees for General Motors, and all of the licensees pretty much know each other, and what they are doing. So, what gives?

The answer is re-manufactured, or “Reman”, engines.

Re-manufactured engines are a step up from rebuilt engines. When engines are rebuilt during their overhaul, the parts used may be the same, replaced, or repaired. A re-manufactured engine, on the other hand, is an engine that is stripped down to its’ bare components, and built up to a “like new” condition, with parts and components replaced, modified, or even upgraded. In general, there is nothing wrong with purchasing a re-manufactured engine. Many reman companies perform excellent work, and it is possible to buy a reman engine that will give you many years of service, usually at a much cheaper cost.

However…

Re-manufactured is not the same thing as new…

On OEM new engines:

  • All parts and components on the engine are new. They have never been used.
  • Most manufacturers (including Marinediesel) have extensive testing and quality control procedures in place.
  • When buying a new engine, the full warranty is in effect.
  • Engines are ensured to meet quality and emissions regulations.
  • Engine manufacturers typically have robust dealer networks for spares and service.
  • Some components, like ECUs, are difficult to replicate, necessitating replacement with a different unit.
  • Though manufacturers may use the same engine blocks, many parts are customized by each manufacturer, some of which, like pistons or cylinder heads, are not easily modified or duplicated.

If a re-manufactured engines is sold as a new engine, then the practice is deceptive. Most reman companies are not doing the actual research and development work. Most re-manufactured engines have greatly reduced or highly limited warranties. Components on the engine could come from a variety of different sources that may, or may not, have been properly tested. Most vessels cannot be classed with re-manufactured engines, because the engines themselves cannot be classed.

So, the competing engine at half price? It was a re-manufactured engine. Though the engine may very well perform as the buyer expects, it also could cause problems in terms of life cycle, and depending on location, service (In this case, the buyer will be in for a rude awakening when the engine needs service). Additionally, though the customer claimed it was a “VGT” engine, the engine most certainly was very different in terms of performance. Though it may resemble the Marinediesel VGT, and share the vsame engine block, the engine itself was a completely different engine. So, yes, the engine was cheaper. But it was, certainly, not the same.

What is important to consider is the old cliche: “If it sounds too good to be true, it probably is…”

Choosing the Right Engine

 

 

As an engine manufacturer, MarineDiesel would love to be able to answer the question, “Which engine should I choose for my project?” with a resounding “MarineDiesel, of course!” every single time. However, that is not the correct answer to give. Different engines have different strengths and weaknesses, and ours are no different. We often get requests to quote where our engines are simply not an appropriate match for a project. Sometimes, people are just price shopping, matching horsepower to horsepower, and sometimes a new project pops up where the shipyard does not have a lot of experience.

When determining the engine to choose, price should be among the last crieria that should be considered. There are far more important questions to ask:

  1. How will the vessel be used? Our engines tend to focus on fast boat applications. They are normally not a good match on tug boats, for instance (Though sometimes, occasionally, they are suitable).
  2. How much space is available for the engine? Smaller spaces require smaller engines.
  3. Is noise a problem? Engines are tested for noise when manufactured. Noise can be controlled through both silencing and insulation, in addition, yet those items also have costs in space and money associated with them.
  4. Is vibration a problem? Some engines, such as our VGT Series, produce much less vibration than inline models, due to their physical characteristics. Additionally, there are aftermarket ways to control vibration, like the use of different mounts or couplings.
  5. How capable is your maintenance team? Some engines are more complex than others. Some require a higher level of skill to maintain.
  6. Price. Price is important, and does play a role. However, consideration also needs to be given to the cost of spares, service, and training.
  7. Life Cycle / Rating. An engine used 2,000 hours per year needs a longer life cycle than an engine used for recreational purposes.
  8. Service network. Some engines may fit all criteria, but there is no service in your country available. Engine maintenance gets expensive very quickly when performed across continents.
  9. Warranty. How good is your engine’s warranty? Some manufacturers have better warranties than others.
  10. Fuel consumption. Fuel costs, on average, exceed 60% of any engine’s operating cost. Cost savings are significant over time.
  11. Performance expectations. You need to have proper calculations made with bona fide data: Not just guesses. Horsepower and torque requirements can vary drastically with small differences in hull design.
  12. Emissions requirements. This can be important. Laws and regulations vary widely between regions / nations.

We realize that choosing an engine is complicated. Contact your local MarineDiesel dealer for personalized assistance on your project.

 

 

 

 

Vessel Downtime: The price of going CHEAP

 

Price is a sensitive topic when it comes to engines. Indeed, up to 30% of the cost of a vessel can be engines, often times even more if the cost of the entire propulsion system is taken into account. Indeed, it is understandable and human nature to get something at the cheapest price possible.

In certain regions, the engine market is flooded with inexpensive engines, most of which are really not competitive when it comes to technical capability, reliability, or performance. These engines nearly never meet strict European or American emissions standards, and are often poor substitutes based on tender requirements or other performance criteria. Spare parts availability and quality are often another issue, as is the availability of service. Yet, they always have one thing going in their favor: They are CHEAP.

We are the first to admit that these types of engines have their place in the market. There are market niches and uses for very inexpensive engines. MarineDiesel normally does not participate in these markets. We manufacture high performance, reliable engines that meet international standards for quality and emissions. Yet, we sometimes run into situations where someone seems to be getting something that is too good to be true…

What does a cheap engine get you?

  1. Lower purchase price.
  2. Shorter life cycle.
  3. Lack of dealer network.
  4. Lower performance capability.
  5. Higher fuel consumption (normally).
  6. Greater amount of maintenance.
  7. Much higher vessel downtime.

Item number 7 is the most important. Before choosing an engine, you need to ask how much does my vessel being inoperable REALLY cost me?

In economics, this is known as “opportunity cost”. What you give up in order to gain a benefit, in this case, lower price. To illustrate, say you own a passenger vessel seating 20 people that is used for tourism. You operate on a voyage that last 4 hours, 4 times per day. You charge EURO 30 per passenger. That is EURO 2,400 per day in revenues lost because your vessel will not operate. Suppose you need a replacement part that takes two weeks to arrive and get installed. The lost revenues are now EURO 33,600. The vessel cannot operate, and you cannot earn. Now, suppose you operate in a highly seasonal location, when 80% of your revenues are earned in three months out of the year. The situation has gone from bad, to worse. Have you really saved anything on that purchase price that was EURO 4,000 lower?

No.

This is the important consideration one must make when deciding on an engine. Not just MarineDiesel, but any major brand of marine engine. Things that should be more important than price:

  1. Reliability and life cycle.
  2. Performance.
  3. Spare parts availability.
  4. Service availability.
  5. Compliance with regulations (if present).

MarineDiesel charges what we feel is a fair price for our products (as do other manufacturers). We are usually somewhere in the middle in terms of price. Not the cheapest, but not the most expensive, either. Very seldom do projects come down to simply price when all is said and done, and making a decision based solely on purchase price can be very costly over the long term.

 

 

 

 

 

Weak Euro? Now is the time to buy MarineDiesel!

 

Over the last few months, there has been a lot of gloom and doom written in the financial press about the current weakness of the Euro and the causes behind that weakness. Indeed, much of what has been written can seem pretty scary. Yet, currency fluctuations are nearly always cyclical. The time to take advantage of this fact, for your company, is to purchase now. In the currency world, taking advantage of exchange rates is known as arbitrage, and arbitrage is what you need to be practicing now.

For MarineDiesel customers, the weak Euro has a distinct benefit: Our engines are now much cheaper to purchase. The engines made by our competitors, particularly if they are priced in US Dollars, have suddenly become more expensive. This time last year, the exchange rate was €1 = $1.36. It is currently €1 = $1.12. That means that our engines are now just under 18% cheaper for someone living outside of the Euro Zone.

So, do not delay. Take advantage of the weak Euro by contacting your local MarineDiesel distributor today for a custom quote on your project.

 

 

 

 

 

 

Financing Your Engines

 

 

Engines usually constitute a major percentage of the costs of any marine or industrial project. Indeed, on some high performance boat designs, the engines and drives can be as much as 30% or more of the total price.

By offering complete propulsion packages, engine, gearbox, and drive, MarineDiesel can often help offset some of these costs while guaranteeing performance levels.

However, formal financing is often a requirement for our customers, particularly on large projects.

Engine purchases are often very difficult to finance, due to the fact that it can be very difficult to separate an engine purchase from the purchase of the vessel. It comes down to risk: The finance company looks at the risk from the “what if the customer doesn’t pay?” perspective. This problem is compounded by the fact that engines depreciate up to 30% of their value on the date of commissioning, whether used beyond that date or not. Therefore, most engine manufacturers that offer financing are only able to make that offer when the engines are tied via lien to the financing of the vessel as a whole. This often causes conflicts with documentation or complications on the financing itself.

So, what is the solution?

MarineDiesel works with EKN, the Swedish government’s export finance department ( EKN Website ), to offer financing plans to our customers. The financing program requires approval, and is not available in every region or on every project, but we have financed numerous projects through them in the past, and the process is relatively straightforward.

Additionally, MarineDiesel works with other lenders in different regions, and we can occasionally make arrangements for specific projects. Simply inquire with us or your local distributor at the time of quotation and we will try and arrange a financing proposal for your project.

 

 

 

Price Increases Coming Soon

 

 

Early this coming January, MarineDiesel will begin notifying our dealers and distributors about 2015 pricing.

Though engine prices will be slightly increasing, the increases are minimal and reflect the increased costs associated with production.

MarineDiesel will honor all quotes  made at 2014 prices for the duration of the quote.

This article is intended to give ourt customers the opportunity to beat the price increase by submitting requests for quotes before year end.

 

Engine Comparisons: VGT400

 

 

This week, we will be highlighting several of our engine models and be comparing them with others that are in the market. Our engines stand on their own merits. All data on other engines is available online. Comparisons are based on closest models / ratings for each manufacturer.

This article is related to the MarineDiesel VGT 400. Using the Duramax 6.6L as a base, we have created the lightest, smallest, and most powerful marine engine in the market today. Ideally suited for small, very fast craft, the VGT 4oo delivers the high performance standards that simply leave other engines lacking.

Figures are based on commercial rating, when possible (Some manufacturers only have one rating, others have multiple ratings.)

Some specifications:

Engine Comparison MarineDiesel Volvo Cummins Yanmar Iveco / FPT
Engine Model 400 D6 400 QSB 5.9 6LYA-STP N60-400
Retail Price (Manufacturer’s Suggested Retail Price, online. Prices may vary significantly. Add’l discounts may be avail) € 34,857 € 34,520 € 35,258 € 33,407 € 29,957
BHP 400 400 420 370 400
kW 299 299 313 272 294
RPM 3600 3500 3400 3300 3000
Cyl 8 6 6 6 6
Displacement (l) 6.6 5.5 5.9 5.1 5.9
Bore / Stroke (mm) 103/98 103/110 102/120 106/110 104/132
Maximum Torque Nm 820 980 1231 1010 1060
Time Between Overhaul (hours) 3000 1000 2000 1000 1500
Time Between Maintenance (hours) 100 50 75 50 100
Dry Weight 500 699 658 530 595
Fuel Cons at Top Speed g/kWh 215 214 218 215 215
Power / Weight kW/kg 0.60 0.43 0.48 0.51 0.49
Euros per kW € 116.58 € 115.45 € 112.65 € 122.82 € 101.89
Overhaul Cost (60% of New) € 20,914.20 € 20,712.00 € 21,154.80 € 20,044.20 € 17,974.20
Cost at 10,000 hours (Purchase, Overhauls, and Maintenance) € 104,573 € 241,644 € 141,035 € 233,853 € 149,787
Fuel Cost at 10,000 hours, Fuel EUR 0.80 / Litre (Calculated at 370 hp) €566,887 € 564,250 € 575,086 € 556,952 € 557,407
Total Cost of Ownership 10,000 hours € 671,460 €805,894 € 716,121 € 790,805 € 707,194

So, engine weights are listed in the table above. What about engine size?

(L) X (W) X (H), in mm

MarineDiesel VGT 400: 779 X 825 X 973 (Note: MarineDiesel engines always allow for remote location of some components, such as the grid cooler, filters, or starter motor. Dimensions, particularly height, can often be reduced considerably or shifted around to a great extent.)

Volvo Penta D6 400: 1,357 X 786 X 920

Cummins QSB 5.9: 1,255 X 836 X 858

Yanmar 6LYA – STP: 1,274 X 819 X 843

FPT N60 400: 1,349 X 843 X 788

 

Curves:

When comparing power, and especially torque, curves, you need to keep in mind how the vessel will be used. All engine manufacturers rate their engines differently, many times with several different ratings under a single model. Others, like MarineDiesel, can change the ECU and engine programming to suit a vessel’s mission. The curves below are the most common ratings, but when reviewing, attention must be given that these curves can be different or altered due to rating.

MarineDiesel VGT400:

VGT400 torque

VGT400 torque

Volvo Penta D6 400:

vp d6 400 curves

Cummins QSB 5.9 Curves:

cummins qsb 420 curve

Yanmar 6LYA-STP Curves:

yanmar 6lya curves

FTP N60 400 Curves:

FTP N60 curves

 

 

 

Engine Comparisons: VGT350

 

 

This week, we will be highlighting several of our engine models and be comparing them with others that are in the market. Our engines stand on their own merits. All data on other engines is available online. Comparisons are based on closest models / ratings for each manufacturer.

This article is related to the MarineDiesel VGT 350. Using the Duramax 6.6L as a base, we have created the lightest, smallest, and most powerful marine engine in the market today. Ideally suited for small, very fast craft, the VGT 350 delivers the high performance standards that simply leave other engines lacking.

Figures are based on commercial rating, when possible (Some manufacturers only have one rating, others have multiple ratings.)

Some specifications:

Engine Comparison MarineDiesel Volvo Cummins Yanmar Iveco / FPT
Engine Model 350 D6 370 QSB 5.9 6LYA-STP N60-400
Retail Price (Manufacturer’s Suggested Retail Price, online. Prices may vary significantly. Add’l discounts may be avail) € 30,450 € 29,985 € 31,694 € 31,361 € 28,964
BHP 350 370 350 370 370
kW 261 272 261 272 272
RPM 3600 3500 2800 3300 3000
Cyl 8 6 6 6 6
Displacement (l) 6.6 5.5 5.9 5.1 5.9
Bore / Stroke (mm) 103/98 103/110 102/120 106/110 104/132
Maximum Torque Nm 820 980 1231 1010 1060
Time Between Overhaul (hours) 3000 1000 2000 1000 1500
Time Between Maintenance (hours) 100 50 75 50 100
Dry Weight 500 677 612 530 595
Fuel Cons at Top Speed g/kWh 215 216 219 215 225
Power / Weight kW/kg 0.52 0.40 0.43 0.51 0.46
Euros per kW € 116.67 € 110.24 € 121.43 € 115.30 € 106.49
Overhaul Cost (60% of New) € 18,270.00 € 17,991.00 € 19,016.40 € 18,816.60 € 17,378.40
Cost at 10,000 hours (Purchase, Overhauls, and Maintenance) € 91,352 € 209,899 € 126,779 € 219,531 € 144,822
Fuel Cost at 10,000 hours, Fuel EUR 0.80 / Litre (Calculated at 350 hp) € 534,429 € 532,898 € 544,371 €530,430 € 555,101
Total Cost of Ownership 10,000 hours € 625,781 € 747,797 € 671,150 € 749,961 € 699,923

So, engine weights are listed in the table above. What about engine size?

(L) X (W) X (H), in mm

MarineDiesel VGT 350: 779 X 825 X 973 (Note: MarineDiesel engines always allow for remote location of some components, such as the grid cooler, filters, or starter motor. Dimensions, particularly height, can often be reduced considerably or shifted around to a great extent.)

Volvo Penta D6 370: 1,439 X 754 X 885

Cummins QSB 5.9: 1,255 X 836 X 858

Yanmar 6LYA – STP: 1,274 X 819 X 843

FPT N60 370: 1,349 X 843 X 788

 

Curves:

When comparing power, and especially torque, curves, you need to keep in mind how the vessel will be used. All engine manufacturers rate their engines differently, many times with several different ratings under a single model. Others, like MarineDiesel, can change the ECU and engine programming to suit a vessel’s mission. The curves below are the most common ratings, but when reviewing, attention must be given that these curves can be different or altered due to rating.

MarineDiesel VGT350:

vgt350 curves 1014

Volvo Penta D6 370:

d6 370 curves

Cummins QSB 5.9 355:

cummins qsb 355

Yanmar 6LYA-STP:

yanmar 6lya curves

FTP N60 370 (A2):

FTP N60 curves