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A matter of marketing

14th August 2008, Page 52
14th August 2008
Page 52
Page 53
Page 52, 14th August 2008 — A matter of marketing
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Which of the following most accurately describes the problem?

Keywords : Truck, Paccar

Take solace in the fact the used truck market is more than holding its own. Success is just a case of refusing to panic, playing to your strengths, and promoting your product to the right people...

Words: Steve Banner

Times are tough, but it isn't the end of the world. While the haulage industry is undoubtedly under serious pressure, there remains a solid core of established operators that are still trading and still buying used trucks; and there's no need to slash your prices to ribbons to win their business.

That's the message from Lee Smith, a director of West Thurrock, Essex-based independent dealership Hanbury Riverside.

"The dealer who recently said that if you chopped £5,000 off every used truck you had in stock you wouldn't sell any more than you would if you left the prices where they were is absolutely right," he says. "I've got no intention of panicking and knocking out all my stock cheaply.

"While we certainly get people ringing us up, telling us it's a buyers' market and then offering us far less for trucks than we know they are worth, at the end of the day, we have to point out to them that we provide quality vehicles with rock-solid support: and that has to be paid for.

"If you slash prices; you are in effect buying business," he adds. "What you're doing is devaluing your stock, and devaluing the vehicle you've just sold into the bargain. It's irresponsible and doesn't make sense."

No price collapse

Smith dismisses claims that prices have collapsed anyway. "They've certainly levelled out slightly — gone down by one or two percentage points — but suggestions that they've fallen by 20% are ridiculous," Smith states.

Used truck dealers should play to their strengths, he contends. They can supply vehicles instantly, and while long lead times on new chassis are not quite the issue they once were, the prices of factory-fresh trucks are on an upward curve thanks to increased raw material costs and sterling's slide against the euro. Remember too that while the housing market is flat on its back, the prospects for certain other sectors of the economy are better than they have been for some time. Agriculture, in particular, looks set to benefit from rising global food prices.

"Nor are our customers facing particular difficulties when it comes to obtaining the finance they need," Smith states.

What dealers have to be willing to do is market themselves more effectively, he suggests.

"We've been promoting the fact we're willing to customise vehicles — fit lightbars, Durabrite alloys and so on — and we've just invested in a new workshop to help us with our preparation work," he says. "Our willingness to invest is proof, if proof were needed, that we aren't pessimistic about the industry, although I have to say I'm upset by the number of foreign-registered trucks we see on UK roads these days.

"Every Sunday evening years past you'd see all the UK lads on Continental work off down to Dover," he recalls. "You just don't see that any more."

Seasonal lull

Business is invariably quiet at this time of year anyway, says Matt Hammond, used vehicle sales manager at West Thurrock, Essex-based Harris Daf.

"Trucks are parked up, operators and drivers go away on holiday and many of the factories they serve are on shutdown," he points out.

"Frankly, I don't think that this July and August have been any less busy than previous Julys or Augusts and I'm not hitting the panic button."

"It's no busier and no quieter than it usually is during the summer months," agrees Allan Hilton, responsible for used sales at King's Lynn, Norfolk-based Daf dealership Ford and Slater. "As far as agriculture is concerned, what we're certainly seeing is farmers who have trucks parked up that they only really use at harvest-time, deciding that the vehicles they've got won't last another year, and need changing.

"Prices have fallen, but the decline hasn't been huge."

While prices haven't plunged, operators who have stayed at home this summer may find there are some summertime bargains to be had, Hammond contends.

"Right now, you can pick up a really decent 7.5-tonner for /10,000," he says. "That could start to creep up to nearer £12,000 if prices start to harden in the autumn."

And while there isn't a huge amount of interest in standard 13.6m curtainsider trailers and 420hp 6x2 tractor units, more specialised equipment is selling, albeit slowly. So says Bourton-on-the-Water, Gloucestershire-based independent dealer, Peter Gilder. "I'm taking about trucks with cranes, low-loaders, vehicles suitable for heavy haulage work and vacuum and stainless steel tankers," he says.

Exports are quiet, possibly because so many markets are linked to the dollar and the dollar remains weak.

That is likely to make second-hand vehicles exported from the US cheap, but Gilder does not view them as a major threat.

"They're built for American conditions and cannot stand up to the sort of hammering they get in the Third World, which is what we're talking about," he observes.

Chinese trucks are a different matter, he adds. "They're quite good quality, and pretty durable." •


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