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the trade
DEALER NEWS
NORMAN LAW MOTORS
Remaining profitable in a recession
Lancashire-based Norman Law Motors has been trading vans for more than four decades. Since the recession the firm has downsized, bought more new vehicles and remained profitable
Words / Images: Kevin Swallow
Family-run Norman Law Motors, based just outside Colne, Lancashire, started to scale back its activities at the irst signs of recession in 2007.
Damian Law, son of company founder Norman Law, says that ive years ago the company would have put as many as 15 vehicles a week into the auctions. “Just before the start of the recession a lot of inanced and repossessed stock came back into auction.” He adds that stock going into auctions from traders was no longer wanted. “They didn’t want to hear from you, but that’s why we stuck with Manheim because they understood you needed to trade there to swap stuff and trade out wrong stuff, but almost overnight it stopped.
“There was no point having all these vans around here so we scaled back. We do much less, but still make the same proit. Now it’s gone full circle. With the lack of volume in the marketplace the auctions realise trade has some nice vehicles and want us to put them in,” he says.
Law attends as many as three auctions a day, buying around 15 vans a week for himself and other used van traders. “I usually get people providing me with a shopping list. If you have a small pitch and you are the buyer, salesman, valeter and the driver as well and there are only one or two vans at auction you want, it seems stupid to stand there all day when you could ring us. We can buy the van as cheap, if not cheaper, and deliver it the next day.” The type of vans Law buys tend to be late-year product under warranty, with lower mileage, but he will buy anything that is a little different and that he knows he can move on.
The lack of late-year product in the market means he has increasingly turned to new sales as a supply of vehicles. “We now have terms with Ford and Volkswagen, and we do a lot of new four-wheel-drive vehicles.
Second-hand sales
“We run the new vehicles to approximately 500 to 1,000 miles then sell them. We have been running 4x4s for the last six months, eight or nine Toyota Hi-Luxes and sold them as second-hand rather than new,” he explains.
With the second-hand market struggling to meet demand, depreciation on new stock after six months is replaced by proit. “Some of the VW Transporters that we have specced with 140hp engines and DSG automated gearboxes and run for six months, we made £2,000 to £4,000 proit on. It makes a mockery of the igures and values.” As OEMs scale back production there are signs that lead times are starting to become an issue for buyers. “I ordered four VW Transporter Sportline Kombis to run this summer. I ordered them in July 2011. It looks like the irst will arrive in March and the others in June/July – a whole year.
“You could put 1,000 miles on them and if there is someone who wants it, and couldn’t wait a year, they’d pay for it,” he says.
And things aren’t going to change any time soon. Law says the lack of vehicles aged 12 to 18 months will continue because fewer people are buying new vehicles and those who do tend to run them for longer.
Prices on the up
“The majority of prices have shot up and on some of the nicer stuff you can ask for more! Prices have gone up 10% easily.
“We bought a Citroën Relay 15 months ago from Manheim, Haydock when Newtown Rental went bust, in DHL yellow, with 75,000 miles on the clock. It was £3,200 on an 08-plate. We had it advertised at £4,500 and couldn’t sell it or trade it.
“A friend, who couldn’t get inance, used it for 11 months. It’s come back with 95,000 miles on and we got £4,750 for it within days. Even though it’s jumped in miles, it’s up in value,” he adds.
The only businesses that can change the current environment are the major rental and leasing irms, says Law, and that is by putting more vehicles on their leets and re-leeting vehicles earlier.
However, that doesn’t seem likely to happen. “They are all happy running vehicles two years longer and getting two years more rental/lease money and still selling the vans well,” he says. ■
HUMBLE BEGINNINGS
Norman Law started trading vans more than 35 years ago when he was a butcher, before giving up cutlets for motors.
He took a back seat six years ago, but is still very much involved, explains his son Damian.
Norman Law Motors has a second site in Brierfield, Nelson, just off the M65 motorway, which it shares with Vertex Vehicles run by Andrew Bannister. From here Norman Law Motors retails vehicles, which takes the pressure off the company, says Damian.
With so much experience the company is able to be selective about what it buys. “There is stuff I know we can draw real premiums from. If it looks cheap but you can see something, we can spend an hour with it back here. If you can see through what it is, we can turn it around.
“Large numbers of identical vans, like the British Gas vans 18 months ago, can be hard work. We steer clear of those but anything slightly different we’ll go for.”
Charity work
Last September, Damian Law bought the Volkswagen Transporter revamped by Manheim Remarketing as part of its charity coast-to-coast cycle ride to raise money for Macmillan Cancer Support.
“I used it for around three months and have only just sold it,” he says. “We sold it to a trader, who sold it to a camper place in Devon.”
CM had snapped up the 2008-registered VW Transporter T28 for £4,000 (CM, 20 October 2011) from Hitachi Capital Fleet Solutions before it was revamped.
The van went under the hammer for £6,900, raising £2,900, which went towards more than £16,100 raised for Macmillan Cancer Support.