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Have operators finally twigged that Euro-6 - with all its baggage - is almost here? It could explain the surge in Euro-5 sales Words: Steve Banner A growing realisation among operators that Euro-6 is a looming reality and that its arrival is now little more than a year away could have contributed to a pre-Christmas upswing in used sales at West Thurrock, Essex-based dealership Harris Daf.
Buyers wary of Euro-6 because they fear it will impose front-end cost, payload and fuel consumption penalties, might already be looking to obtain late-registered Euro-5 models instead, in order to tide them over.
"I sold a number of 7.5and 18-tonners, as well as some tractor units, and they were all Euro-5;' says used vehicle sales manager Matt Hammond. "While I cannot be certain that these sales were driven by Euro-6 concerns, it is certainly true that some customers are starting to talk to me about it and its implications: and while Euro-6 isn't all that frightening in reality, there is no denying that trucks that meet the new standard will cost more': Operators who want to avoid this price burden by purchasing a late-registered Euro-5 model will have to act soon, he says. Hammond agrees this sounds a little bit like a sales pitch, but contends that it does not make what he says any less true.
The shortage will increase over the coming weeks and months, and prices won't get any lower;" Hammond predicts. 'There's a lot of nice stuff out there, but stocks will soon be depleted': The number of Euro-5 trucks being defleeted in the weeks after Christmas could relieve the situation for a while. "However; the shortage will become more apparent as demand picks up this year;" argues Lee Smith, a director of independent dealership Hanbury Riverside, also based in West Thurrock. "Admittedly, it is a brave man who buys now as the economic news isn't fantastic, but it may be the clever thing to do because desirable 2009, 2010, and 2011 vehicles will become harder to find': The only alternative?
Some dealers report that low-mileage vehicles are already in short supply. 'There are plenty of Euro-5 tractor units out there, but a lot of them are high-mileage;' says Andy Mackay, used truck sales specialist for the North West at Daf dealership Chatfields. He wonders how willing buyers will be to accept them if they end up being the only alternative to Euro-6.
In Smith's view, the used truck market is stable at present and showing no signs of collapse, but is not performing spectacularly either. "Prices are fairly steady and I'm happy with our performance, given that we're working in a cautious climate that is short on business confidence;' he says.
Euro-6's effect on the used market, while set to grow in significance, should not be exaggerated. It is certainly not the case that all buyers are worrying about it or are busy hunting for Euro-5 vehicles.
"I don't think hauliers are looking that far ahead:' says Matt Heath, general manager; fleet sales at Maritime Transport, who is responsible for the company's used truck disposal operation. "Many of them are more concerned about what's going to happen in the next three or four months — never mind in the next 12 months': "I suspect that is true;' says another dealer, who asked not to be named. "Hauliers are more worried about their cashf low, and whether they'll have enough money to pay their diesel bills in the next fortnight than they are about Euro-whatever Some operators — those that serve local markets, for instance, and never venture anywhere near London — are still happy with Euro-4 and even Euro-3 models, and Jamie McDonald is more than willing to sell vehicles to them. Based at a site not far from Besthorpe in rural Norfolk, he runs independent dealership RJM Commercials.
"I had the best November and start to December that I've ever Karr he says. "Things went absolutely crazy. I almost sold out of everything and the prices I got weren't too bad either."
McDonald was so short of stock he had to resort to putting his new car in his regular adverts in CM to fill a blank space. "I was starting to wonder whether I was going to have to advertise my boot laces in the ad that I'd booked for the following week:' he jokes.
Nor were all the trucks he was selling pitched at the budget-oriented end of the market. "A lot of them were Euro-3 or Euro-4, but I managed to sell a number of units priced at about £40,000," he reports. 'That's the sort of money that will buy you a 2007/2008-registered Scania Topline 620hp 6x2 tractor unit. It holds its value remarkably well."
No longer economic McDonald is at a loss to explain the sudden up-tick, which he doesn't believe is overly influenced by Euro-6 concerns. It could instead be a consequence of some operators simply concluding that their existing trucks are no longer economic to run and must be replaced if they want to stay in business.
"If you've got a 2003 truck that you cannot take into London without paying a penalty because of the Low Emission Zone, and you don't want to spend £5,000 on an approved filter, then it makes sense to replace it — but with a late-registered Euro-5 model that you can keep for seven or eight years," says Smith.
He believes the cost of new trucks in particular — even with the big discounts on the list price that are available in many cases — plus the realisation that vehicles are a lot more durable than they used to be, is prompting operators to extend their replacement cycles.
'The days when owner-drivers and small firms changed their trucks every couple of years have long gone;' he says. "Buy a new truck on finance, and you are looking at a huge monthly outgoing — unless you can reduce it by putting down a 50% deposit, and very few hauliers can do that': Mackay says: "It costs a lot to put trucks on the road: so people want to get their money's worth out of them': •