Changes in attitude
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MI The recession in the new and used truck market is far from over. The picture painted by truck dealers, especially used truck dealers, is that the recession has continued to worsen from June to September.
As time goes by we are still seeing haulage companies, finance companies, finance brokers and truck dealers pulling out or being put out of business.
The whole situation is not being helped by the short-term attitude being taken by the banks, which are continually reviewing their lending policies. The result of this is that many companies are suffering higher interest and bank charges and a reduction of overdraft limits.
Over the years banks have been extremely liberal with their lending and good relationships established with clients con tinued during the earlier part of this recession, but recently this has changed as the banks have been hard hit.
This has caused them to look to their good customers to help subsidise their bad debt customers. To achieve any impact on mounting debt the banks are having to make higher charges and limit their liabilities where possible.
Thus truck dealers, who in the past have been able to obtain near unlimited funds for certain deals, now find that their banks are far less supportive. Bank action has resulted in heavily extended dealers having to reduce stock and in some instances close depots.
Banks' lending policy and the severity of the present recession were highlighted when the Birmingham-based contract hire and truck dealer Ackers Jarrett went into receivership. It is extraordinary that a company of 2,000-plus trucks should have the support of its bankers in March when making the £5m-plus takeover of Truckrent, only to find that support withdrawn a few months later.
The timing of the appointment of the receiver, on 16 August, will invariably lead to various distributors not being paid for J-registered vehicles delivered earlier in the month.
The financial damage this will do to supplying dealers, who will have neither the vehicles nor the money, could have longterm repercussions. Rumours currently circulating in the trade about the treatment Ackers Jarrett received from its bankers have sent cold shivers down the spines of new and used truck dealers throughout the country.
In a business where a man's word is his bond and a high proportion of business is conducted on trust, any question of financial instability can result in a dealer finding it difficult to deal.