As you’ve probably heard, it was recently discovered that a large number of Volkswagen’s diesel engines are engineered to defeat EPA testing procedures by switching to a lower-emissions engine map when the computer senses that a test is being performed. Outside of the testing environment, these engines run a higher-emissions map that provides increased power and economy. Sound familiar? This is the same situation that truck and engine makers found themselves in back in the late-90’s, a period they’d probably rather forget.

For those new to the commercial truck industry, in the 1990’s, the Environmental Protection Agency (EPA) discovered that almost all heavy diesel engines on the market were running this same type of emissions-defeating strategy, for the same reasons. In 1999, engine OEM’s signed “consent decrees” with the U.S. District Court for the District of Columbia essentially agreeing to pay fines and meet upcoming 2004 emissions standards two years early (for model year 2002).

This second part – the accelerated emissions requirements – caused a massive “pre-buy” of new trucks, in which sales of model year 2000 and 2001 trucks spiked. This dramatic increase in new truck sales created a tidal wave of used trucks, which greatly depressed used truck pricing. In addition, sales of MY2002 trucks dropped dramatically.

It took a few years for used truck supply and demand to return closer to equilibrium, and truckmakers absorbed major impact to their financial results due to the fines and the unplanned drop in sales of MY2002 trucks.

Currently, it looks like this situation may not necessarily be limited to VW. As the shakeout occurs, automakers would be wise to read up on how the commercial truck industry handled the fallout from this same issue 15 years ago.