Requiem for the Two-stroke-power-cycle Outboard Engine

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jimh
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Requiem for the Two-stroke-power-cycle Outboard Engine

Postby jimh » Mon Mar 15, 2021 8:40 am

At 5 p.m. on May 27, 2020 BRP announced they were ending production of the Evinrude E-TEC outboard engine. At that moment in time I was NOT aware that their competitor, Brunswick, had already ceased production of their last two-stroke-power-cycle outboard engine, the Mercury OptiMax, two years earlier in May 2018. Production of the Mercury OptiMax had already been reduced to models in only the 200 to 300-HP range, whereas earlier the OptiMax was available in lower horsepower, down to about 135-HP.

When Brunswick dropped the OptiMax in May 2018, they nearly simultaneously announced new "FOURSTROKE" models in the 200 to 300-HP range based on V6 and V8 blocks using four-stroke-power-cycle combustion without forced induction and with large displacement that would be replacements for the OptiMax.

The significance of the Brunswick decision to stop making Mercury OptiMax in May 2018 was that it was abandoning the market for two-stroke-power-cycle direct-injection EPA-compliant outboard engines, and thus the E-TEC was the ONLY outboard engine available in that market. BRP and Evinrude were being offered a golden opportunity to sell more E-TEC engines: they were the only game in town.

Considering that the market demand for two-stroke-power-cycle direct-injection EPA-compliant outboards would not have instantaneously collapsed with the departure of the OptiMax, one would have anticipated that BRP could have moved into the void left by the end of the OptiMax and sold more Evinrude E-TEC engines. But I think several factors prevented that from occurring.

First, many of the OptiMax engines were being sold on boat transoms as a new boat package. These new boats were either built by boatbuilders already owned by Brunswick, or built by boatbuilders with agreements to use Mercury engines exclusively or nearly exclusively. Those arrangements prevented BRP from being able to capture those transoms. Clearly a Brunswick boat builder was not going to ever sell a boat with a BRP engine on the transom, and other boat builders with a long history of using Mercury engines were not going to jump over to BRP's Evinrude E-TEC. Instead of BRP capturing all those transoms, they went to Mercury FOURSTROKE engines in most cases.

Second, there is a tendency for strong brand loyalty among customers who buy an outboard engine that is not part of a new boat package. Boaters who bought Mercury OptiMax engines were likely to be, in the first place, already very partial to the Mercury brand--perhaps so partial that they would rather abandon the two-stroke-power-cycle direct-injection outboard engine entirely before they would buy an Evinrude engine.

Further evidence of the customer preference in outboard engine designs was the extremely strong sales of Brunswick's new Mercury FOURSTROKE V6 and V8 engines. Following their introduction there was, apparently, such strong demand that sales were constrained only by production capacity, and customers had to tolerate lead-times of several months to get these new engines.

After two years of having the two-stroke-power-cycle direct-injection outboard engine market completely to themselves, BRP was apparently not impressed with the sales trends for Evinrude E-TEC. I strongly suspect that the failure of Evinrude E-TEC to demonstrate significant sales growth into what should have been a captive market for two-stroke-power-cycle direct-injection EPA-compliant outboard engines MUST have been a factor in the decision by BRP to exit that market and end production of the E-TEC engine.

As a corollary to Brunswick ending all production of the Mercury OptiMax engine, another Brunswick marine brand, QUICKSILVER, announced several months later that they would begin to offer a new product: remanufactured fully-dressed OptiMax 3.0-liter V6 powerheads, which could be easily bolted onto existing Mercury OptiMax midsections and gear cases in three hours. This would give the truly die-hard OptiMax owners a means of buying another OptiMax engine.

I have no idea of the sales volume of these QUICKSILVER remanufactured OptiMax power heads, but apparently there must be enough market for them to convince QUICKSILVER to undertake production of the replacement powerheads. It also gave some reassurance to Mercury OptiMax owners that they were not left stranded alone on an island, that Brunswick would continue to provide a means of maintaining their OptiMax engines. The remanufactured fully-dressed good-as-or-better-than new OptiMax powerheads sell for about $8,000 to $10,000 depending on the horsepower.

One has to wonder if BRP ever considered entering into such a business for the E-TEC engines. Certainly there must be some very loyal E-TEC owners that might be potential customers for a fully-dressed replacement powerhead for their E-TEC engines.

You could say that since May 2018 the Evinrude E-TEC has had 100-percent market share in two-stroke-power-cycle direct-injection EPA-compliant outboard market--they were the only choice. But they failed to grow their sales volume significantly in a exclusively held market.

To have seen Brunswick drop production of Mercury OptiMax in 2018 and replace that segment of their product line with four-stroke-power-cycle non-forced-induction large-displacement outboard engines, and to have that new product line produce very strong sales should have been interpreted as an omen about customer loyalty or customer preference for two-stroke-power-cycle direct-injection EPA-compliant outboard engines; that is, there was not much loyalty or much preference.

E-TEC owners and enthusiasts were probably not able to see the OptiMax end-of-production for what it really was: the beginning of the end of the two-stroke-power-cycle outboard era.

The irony about Mercury being in the business of remanufacturing their own failed powerheads is that there were a lot of failed-under-warranty new powerheads they had to take back from customers. So many, it seems, that Mercury really had to be in and remain in the remanufacturing business to get some value out of all those failed engines.

It might be cogent to note that the current CEO of Brunswick was the former head of Mercury Marine outboard development. One of the bullet-points on his resumé is that at Mercury he reduced engine warranty costs by 70-percent. That might have been significant to his career-rise with Brunswick.

I believe that high costs for warranty repairs were also a factor in BRP's disappointment with the E-TEC G2 engines.

At about the same time, there was a very big increase in outboard engine power on 30 to 40-foot boats. Boats rigged with three or four outboard engines are now common. Again, this should have benefited BRP and Evinrude.

Apparently, BRP did not see this new market opportunity realized in increased sales. The reasons for that are quite the same as I mentioned already: many boat transoms were captive due to co-ownership with Brunswick, and other builders of 30 to 40-foot boats were already in strong partnership with Brunswick (Mercury) or Yamaha.

A further problem for BRP in trying to gain market share in the 30 to 40-foot multiple-engine outboard boat market was lack of an engine rated above 300-HP. Mercury had their 400-HP VERADO and Yamaha had 425-HP engines. On big outboard boats, engine weight was never much consideration. And with the G2 engines, Evinrude had already lost all the engine weight advantage they once had.

At one time Evinrude was nicely position in the loose-engine for re-power market as the lower-weight choice. They effectively gave up that advantage when the G2 engines came out, and particularly so when the second wave of V6 G2 engines with smaller displacement that the first G2 models came out. The E-TEC kept getting heavier, and at the same time competitors' four-stroke-power-cycle engines kept getting lighter--to the point in some cases they weighed LESS than the E-TEC in the same power category.

What has actually occurred is a huge increase in use of three-engine and four-engine rigging of 300-HP or higher outboard engines on large boats that formerly would have used inboard or sterndrive power. This new market for outboard engines should have benefited Evinrude. Instead, BRP must not have seen much future in it for the E-TEC G2.

There apparently was no development at Evinrude of four-stroke-power-cycle outboard engines. Factors that might have accounted for that are:

--the marketplace was already filled with four-stroke-power-cycle engines, so a new Evinrude four-stroke-power-cycle engine would be competing with very highly developed, very highly established engines from four competitors, Mercury, Yamaha, Suzuki, and Honda. Developing an entirely new engine with entirely different technology is not something easy or inexpensive.

--there is no basis to assume that Evinrude had on its engineering staff people who had experience and had demonstrated talent in development from a clean-sheet of a modern four-stroke-power-cycle engine, and, in fact, the head of engineering was a long-time employee whose background was principally in two-stroke-power-cycle engines, which likely gave him the most influence on what would be done;

--among competitors, particularly at Mercury, the transition from making two-stroke-power-cycle outboard engines to making four-stroke-power-cycle engine was usually done by hiring in a major new engineer that had extensive experience in design and development of high-preformance four-stroke-power-cycle engines. At Mercury they hired a German engineer (Klaus Bruestle) from Porsche's FORMULA-ONE racing to lead development of a new product line that resulted in the enormously successful VERADO. Later they hired another outside-the-company engineer (David Folkes--read about his background) from another automobile engine maker (FORD) to develop follow-on FOURSTROKE (not VERADO) engines;

--it is likely that the Evinrude engineers were very strong proponent of the E-TEC and two-stroke-power-cycle engines that they had developed over more than 20-years, and they were able to influence senior management that staying in that realm--particularly since it was now an exclusive market--was the best plan going forward; it would also avoid perhaps spending $100-million to develop a new outboard engine from scratch using four-stroke-power-cycle technology.

The principal market for outboat engine sales is with new boat--new engine packages. The CEO of BRP as much as said that in his comments in the May conference call: "...industry growth was driven by the package sector...". The whole outboard engine business was moving toward packaged deals of new boats with new engines.

The re-power market for loose engines has probably begun to decline. My thinking is:

--beginning about c.2000 with the influx of four-stroke-power-cycle outboard engines imported from Japan, the reliability and durability of outboard engines began to improve, and the service life of the typical outboard increased; this means that new boats bought in c.2000 and later have not needed outboard engine replacement, and may not need one for a while;

--since Evinrude did not have much participation in packaging their E-TEC engine with new boats made after c.2000, when those boats would need a new engine they probably would be most likely to get another one of the same brand as already on the transom; not much market there for E-TEC

--older outboard engine boats, pre-2000 and older, probably have already had an engine replacement with a modern engine; as these boats get older and older, they become less likely to be re-powered with another engine due to the expense of the new engine.

The 150-HP Outboard Engine Market

I think the E-TEC 150 V6 60-degree block was a great engine. And there are many boats that could be re-powered with a 150-HP engine. With a 20-inch-shaft the E-TEC 150 weighed 418-lbs.

Consider this interesting correlation: in 2011 when Mercury introduced its FIRST all-new FOURSTROKE (that's what they call them) engine as the follow-on to the VERADO V6 and L4 FOURSTROKE engines, it was a 150-HP model. The engine had a 3.0-liter L4 block and weighed 455-lbs in "lightest version" (an obscure way to say 20-inch-shaft model). It was 37-lbs heavier than the E-TEC, but I don't think that was enough to have much influence on engine choice. When this 150 FOURSTROKE hit the market it was a big success. Even today, on the Mercury website, they promote this engine using the term "repower."

Before this engine, Mercury had the VERADO 150 FOURSTROKE that weighed 510-lbs ("lightest version"), or 92-lbs more than the E-TEC. I am also certain that the cost to manufacture the VERADO 150 FOURSTROKE was much higher than the 150 FOURSTROKE, making the new engine more profitable.

Mercury also went de-evolutionary with the 150 FOURSTROKE: they removed electronic shift and throttle controls, electro-hydraulic steering boost, the supercharger, the intercooler, reduced the overall size, and returned to conventional cowling styling, and they almost doubled the engine displacement compared to the VERADO, to 3.0 from 1.7-liters

Compare this to Evinrude's product development with the E-TEC G2 V6 150. Evolving from the legacy E-TEC 150 , they added added weight, added electronic shift and throttle controls, added integral electro-hydraulic steering boost, and went to very unconventional cowling styling.

Evinrude's product development was in the opposite direction from Mercury's. Which plan worked out for the better?

Oldslowandugly
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Joined: Fri Jan 15, 2016 11:19 pm
Location: Queens NY

Re: Requiem for the Two-stroke-power-cycle Outboard Engine

Postby Oldslowandugly » Wed Mar 24, 2021 11:11 am

BRP missed a huge opportunity.

I can see leaving a saturated market [of four-stroke-Power-cycle outboard engines].

On small boats the two-stroke-power-cycle engines are lighter and easier to maintain. The other [outboard engine manufacturers] abandoned the two-stroke-power-cycle outboard engine] market.

Why did BRP not concentrate on the small engine market?

Small boat owners need small engines that are easy to operate and maintain. Most work is done by the owner. Four-stroke-power-cycle outboard engines add complexity and weight.

By far the bulk of boats I see at my marina are between 15-feet and 25-feet in size. They all use two-stroke-power-cycle engines between 50-HP and 250-HP. Not a single one has a four-stroke-power-cycle engine at this time. And all that have been re-powered have been E-TEC engines. I will probably require a new engine in the near future and I don't like the idea of adding another cylinder and more weight to get the same power. What a shame.