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A time of uncertainty

14th January 1999
Page 19
Page 19, 14th January 1999 — A time of uncertainty
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Which of the following most accurately describes the problem?

During the first week of each new year the SMMT publishes its overall truck sales figures for the previous year: this is also the time for Iveco Ford Truck's "State Of The Nation" press conference. by Toby Clark Iveco traditionally combines the announcement of its annual sales figures with a review of market conditions and major issues affecting the haulage industry. This year managing director Roger Phillips' theme was uncertainty: the factors that make business decisions difficult, and the factors which distort the apparent health of the truck market.

"Uncertainty is bad for business and even worse for business confidence," he said. "As a result the outlook is less favourable for a healthy, thriving, prosperous transport industry-particularly in the short term."

• Last year was not at all bad for manufacturers: overall sales of vehicles over 3.5 tonnes reached 52,962-the highest figure since the 1980s. The vehicles showing greatest growth were 7.5-tonners, multi-axle rigids and triaxle tractive units.

Though its sales rose by nearly 11%, the Iveco group lost its top position in the market over 3.5 tonnes for the first time in eight years; it was overtaken by the Paccar-owned combination of Leyland Daf

and Foden. But, as Iveco's director of marketing support, Chris Thorneycroft-Smith, put it: "It is not, and has never been, worth buying market leadership...we rejected suicidal trading in 1998."

The most interesting changes have been in buying patterns. The market continues to move towards bigger fleets, heavier vehicles and contract hire, leading to what Phillips called "the challenge of used vehicles".

Over-stimulated

Almost 40% of new sales are now to the rental and leasing sectors. "Such vehicles now have, in effect, two first lives," he said "A short time in rental use, followed by a longer period in second-hand use. In many ways this has over-stimulated the demand for new vehicles in recent years."

With these used vehicles competing with new trucks, Phillips advocated "a proactive

approach" to used trucks, including specialist used truck centres (lveco Ford now owns two such centres) and guaranteed manufacturer support "We recognise that a vehicle now has to be managed as an asset throughout its working life," he said, "and we accept that we may have to sell that vehicle more than once during that period."

Other areas of uncertainty highlighted by Phillips included VED rates, road pricing, drivers' hours and diesel costs. "No-one is likely to invest in new vehicles, new systems and new ways of doing things until they know what the direct costs of those investments are going to be," he pointed out.

The most dramatic demonstration of this has been in the tractor market. Iveco predicts a fall of around 10% in HGV sales this year, to around 47,900 vehicles, but demand is bound to be influenced by the "millennium factor" and legislation.

Thorneycroft-Smith concluded: "Government-please get on with it!"


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