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Steady as she goes
Page 60
Page 61
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A month is a tong time in the used truck market and, despite predictions of doom and gloom from some, many dealers see a chink of light among the clouds.
Words: Steve Banner
Don't panic, and don't start wildly slashing your prices. That's the advice to used truck dealers from Phil Holmes, used sales manager, eastern region, at Scania dealership Keltruck. "If you took £5,000 off each and every truck in your yard right now, you wouldn't sell any more today than you did yesterday," he contends.
"Confidence is much more important than price at the moment, and the fact is that hauliers don't have sufficient confidence in the state of the economy to go out and acquire vehicles. They feel that everything is stacked against them." Holmes advises a steady hand on the tiller: "Cut prices now, and it will be a long time before you're able to build them back up again."
Reducing prices is bound to be a temptation for some dealers, however, as demand falters. "There's a slowdown in Britain, and it's hitting everybody," reports Anthony Wright of independent dealer and exporter European Vehicle Sales, which is based near Doncaster. "People aren't spending money at present." However, he notes: "The export side is still reasonable, but the problem is that the credit crunch is a worldwide phenomenon. Banks around the world aren't keen on lending money at the moment. As a consequence, we're finding that customers from places as far afield as Africa and Russia are struggling to get funding, although they usually manage it eventually."
And as the credit crunch is felt at home, Wright says he's increasingly finding that the British hauliers he talks to are buying to a strict budget. "As a consequence, over the past few months I've got rid of virtually everything that retails at over £25,000 — that's the most customers will spend because they want to keep their monthly payments as low as possible."
Tough competition
Meanwhile, Holmes maintains that the difficulty for operators looking for less expensive vehicles is that they are competing with exporters in search of trucks typically priced at up to mom Yet while Wright confirms that prices have come down, especially on late-registered vehicles, he offers some good news in so far as "they seem to be levelling out across the board now".
Likewise, Paul Prewett, general manager, used sales, at Scania dealership TruckEast (which has outlets in Felixstowe, Stowmarket and Wellingborough), is adamant that while "prices have certainly fallen a bit, they haven't collapsed". And business is far from dead: "While the tractor unit market has slowed down and the tipper market has gone quiet, we're still managing to sell trucks, although business is not as frantic as it was — and we all know it."
Holmes also notes: "There's not a lot happening with tippers, the London Olympics construction site doesn't seem to be generating much work yet. There seems to be plenty of interest in 18and 26-tonners, though."
Indeed, other dealers see similar opportunities despite the tough conditions. "There's still business to be had, but you've got to roll up your sleeves in order to get it," says Paul Diamond, used truck specialist at Road Range, with sites in Liverpool and Llandudno and on Deeside.
Working for results
"You've got to graft for it — it's certainly not going to be handed to you on a plate. Tractor unit sales are slow, but demand for rigids is pretty buoyant," he continues. "Inquiries are still coming in and I've just sold a couple of 26-tonners to a customer in Manchester."
One positive development is that used stock is far easier to come by than it was 12 months ago. "Shortage of stock is no longer a problem, and quite a few franchised dealers have new vehicles available too, thanks to cancelled orders," Wright comments.
"It's easier to get stock, but there's not a lot of point in having it readily available if nobody wants to buy it," says Andy Mackay, used sales specialist at Manchester Daf dealership Chatfields. "Consequently the last thing you want at the moment is a yard full of trucks. I suspect that nothing will change until something is done about the price of diesel."
That said, Mackay has had a lot of interest in some used XF105s the dealership has acquired, and he and his colleagues have sold several of them to eager buyers. "We're also getting one or two calls from operators after trucks that will comply with the London low-emission zone," he explains.
The good news for dealers is that UK operators can still obtain finance, although hinders may be looking for a higher deposit than previously. "We've not had any finance proposals turned down since the credit crunch started to bite," says Prewett. "If you've got a bad credit rating then you're likely to find it difficult to get funding, but that's going to be the case even when times are good."
"We've not had any proposals rejected," echoes Mackay. "If anything, the finance companies are anxious to do business."
Seasonal slowdown
"Don't forget either that sales naturally slow down at this time of the year as people go on holiday," cautions Holmes. "So there's no need to panic for at least the next three months." "In my view, the current situation is a blip," asserts Prewett. "Ultimately goods have still got to be delivered and we haven't got a proper rail freight infrastructure in this country so the only way cargo can get to its destination is by truck. I think the dealers who will really suffer now are the ones who took advantage of the situation and hiked up prices artificially when times were good and trucks were in short supply," he states. "Things are very different now; and hauliers have got long memories." •