Bet placed on propane trucks
Big Valley Ford orders 100 to be converted
Big Valley Ford is pumped up on propane.
The Stockton dealership has sold about 30 Ford trucks converted to use propane and has 70 more in the pipeline.
Propane, or liquefied petroleum gas, became popular as a motor fuel in the 1970s, when oil prices spiked, but its fortunes have risen and fallen with market prices. Still, many commercial fleets, especially those operated by propane dealers, favor it.
Trucks converted to run on propane have been largely unavailable in California the past few years, however, due to regulatory barriers. That's created a pent-up demand.
Marty Ferdani, a commercial sales manger at Big Valley, said propane dealers prompted his interest.
He dropped in on a regional propane convention and asked attendees about propane conversions.
"I was taken by the response from all these propane guys. 'This is what we need,' " he recalled being told.
"So I got enthused," Ferdani said. "It's a big market. There's a lot of propane dealers in this state."
But Big Valley executives had to take a leap of faith last fall.
Ford Motor Co.'s production window for 2010 model trucks was closing, but state regulators still had not approved the truck conversion for sale in California.
If they put in an order, they might be stuck with trucks they couldn't sell.
Still, they rolled the dice, ordering 100 trucks in October. California Air Resources Board officials approved the trucks in February.
The bet has set the dealership apart, said John Clinard, a West Coast regional spokesman for Ford.
"Big Valley Ford is the highest volume propane-conversion dealership in the West for Ford," he said. .
"This is a significant order of propane trucks in the eyes of Ford Motor Co.," he said. "We're very excited that Big Valley Ford has cultivated this business."
Ferdani said the dealership was assured Kamps Propane in Manteca would buy more than 20 of the trucks. "It wasn't a total leap into the darkness."
Plus, there is a federal tax credit that covers nearly half of the $10,500 conversion cost. And there are other state and local incentives as well.
Terry Ayres, a Kamps vice president, said the Ford conversions are a natural fit for his company.
"We see savings of $1.50 to $1.70 per gallon based on the current pump prices and our distributor pricing on propane," he said. "It makes a lot of sense for us in the propane business to run our vehicles on the fuel we sell, and with the tax incentives on the up-fit system and the 50-cent per-gallon tax credit on the fuel, it makes a lot of sense for the end user as well."
Per gallon, propane contains 85 percent to 90 percent of the energy of gasoline, so mileage is a bit lower.
Steve Kubitz, Big Valley's general manager, said there's interest among fleet operators outside of propane dealers. Those include municipal and county governments looking for alternative-fuel vehicles, farmers, as well as environmentally oriented businesses, such as ski resorts and river rafting operators.
"I believe word's getting around," he said. "We'll sell all 100 of them, I'd say, by October."
The experts say propane conversion will appeal primarily to fleet operators who can have propane filling facilities installed on their premises.
But Kubitz expects to see the market expand beyond pickups to delivery and passenger vans.
Demand for propane conversions from airport shuttle operators, he predicted, will be huge.
- Reed Fujii
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