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G IF LE
Page 64
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H&L Gara.es is one of Mercedes' showpiece dealers, and has just opened £.1 ml lion premises. But se lin• in bulk to bi. national customers does not always please fellow distributors.
• Winning fleet business is the key to H&L Garages' success, says Tony Woolley, boss of the Humberside-based Mercedes dealer. His company, based at Immingham, near Grimsby sells to big, national customers like Salford Van Hire in Manchester, Ryder in London and Federal Express in Nuneaton.
It also buys back up to 800 trucks of all makes from these companies and re-sells them through its own garage or via the secondhand trade. Dealing in these used trucks is the real secret of making fleet deals work, says Woolley.
The business is likely to help Woolley shift 1,500 new trucks and vans this year from his outlets in Boston, Scunthorpe and his new flagship premises in Immingham, which have cost almost E1 million to refurbish and which opened officially two months ago.
A dealer with a lot of fleet deals need not worry about hitting targets. Mercedes sold 18,500 trucks and vans nationally last year. But courting national customers can be a touchy subject for dealers. Although most manufacturers give their dealers territories in which to work, big fleets do not necessarily fall into these areas.
Woolley has always specialised in keeping close contacts with fleet transport managers. He previously worked for a Mercedes dealer in Manchester and brought the Salford Van Hire business with him when he moved to H&L. Dealing with fleets is, according to Woolley, "a very personal business." He claims that he has won over Federal Express to Mercedes. The carrier used to run Seddon Atkinsons and Leyland Dafs almost exclusively, he says. Now, half of its 800strong fleet is Mercedes.
Woolley plans to increase his fleet business, and has appointed a sales director, David Roberts, to concentrate on big companies. Roberts was with another Mercedes dealer, Ensor Motors in Warrington, until Woolley approached him.
Now Woolley's success with fleets means that trucks registered from Immingham operate from bases all over the country. Competition with other Mercedes dealers however, is, inevitable. "Although most of our business outside our area is with fleets, if an operator comes to us by choice from Hull, well handle it. But we don't canvas it. You remain ethical to a degree."
And, although Woolley's sales strategy means isolating non-Mercedes fleet operators and approaching them, he admits that H&L does sell to existing Mercedes customers. "There are dealers who are quite happy to exist in their own territory, but others are aggressive and go for additional business," he says.
Although dealers are not allowed to place salesmen in areas covered by other distributors, a customer is entitled to buy a truck from anyone he wants, says David Thomas, operations director of MercedesBenz UK. "But we do believe that it's in everybody's interest that a truck is bought from the nearest dealer."
Thomas agrees that fleet dealing is different. "In whose area is NFC or Sainsburys? On the fleet side, there are a lot of personal relationships and if an individual moves within the franchise network, the business usually moves with him," he says.
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will buy about 900 used trucks this year — 800 from its fleet customers. It has bought up to 400 in one lot from Ryder. It will buy any make, whatever its clients are selling. Having the contacts and resources to do this makes it possible for the dealer to go for large fleet business, says Woolley.
H&L was set up 21 years ago as a Guy outlet. It became one of the first Mercedes dealers when the manufacturer moved into the UK. Woolley, who has been with Mercedes for 20 years, bought into H&L five years ago. Its latest development has seen a rebuilding of the office block and a new parts department.
Woolley says H&L's sales figures, influenced heavily by big fleet deals, distorts its penetration in its territory. He claims a 17% local market share with about 500 sales this year. Its biggest customer on Humberside is Sooner Snacks in Scunthorpe, which runs about 200 Mercedes.
Selling to small companies and ownerdrivers needs a different approach, however. An owner-operator will go for driver comfort. "You have to sell the excellence of the vehicle from a driving point of view as well," says Woolley. This year the company expects to sell 300 trucks to such firms, with bigger returns per truck than with larger fleets.
Woolley also claims a 38% local market share in South Humberside for 16 to 17tonne drawbars and a 30% share of artics over 29 tonnes. As well as the dealership, Woolley has a tyre retreading plant and a trailer factory in Scunthorpe.
The trailer plant, opened a year ago, produces 350 units a year, mostly flats. A bodybuilding facotory is a possible venture: "It's a logical extension, but we would have to be careful," admits Woolley. At Immingham, a £70,000 chassis straightener has been added to the body shop, and an in-house paint shop handles eight trucks a day.
As with most dealers, longer lead times for obtaining vehicles are a problem; most trucks have to be ordered five months ahead. "We try to educate customers to forward order. A haulier might need 20 tractive units tomorrow. We have got to be able to react quickly and we take a calculated risk by ordering a lot of vehicles on-spec," he says.
Mercedes, truck distribution network (60 have a full franchise) is now complete and "basically stable", says Thomas. The next step is to achieve a 20% market share. "We are not saying we'll achieve it by 1992, 1994, 1996, or whatever, but I'll be disappointed if we don't increase our share of 15.4% in the 3.5-tonne and above market this year."
Thomas insists that unfair pressure will not be put on dealers to achieve this share. "We look at the market forecast and discuss a target with the dealer. It tends not to happen that they do not achieve the target," he says.
"We refer to our relationship with dealers as a partnership," he adds. "If someone did not meet their target, we would ask ourselves a few questions. We would not put all the blame on a dealer. Fleet purchases have a big effect, especially if a dealer is suplying 50 trucks a year, and the compar. changes manufacturer."
Mercedes encourages its dealers to expand, but is cautious of pushing any into an area of the country which is not viable. It provides a five-year business plan for its distrubutors, and in the case of a new dealer, will usually accept a small trading loss in the first year.
El by Murdo Morrison