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Branching out
Page 76
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Parts and service are the driving forces behind Pelican Engineering investing £1.5m on new premises for its Hino dealership and MAN servicing.
Words: Kevin Swallow / Images: Tom Cunningham
When you leave the M62 at Junction 31, the scope and size of Castleford's industrial presence becomes clear, huge retail warehouses, Whitwood Truckstop and Wakefield Europort railhead dominate.
It means a lot of trucks need servicing and maintaining, and right in the middle are several truck dealerships, including Pelican Engineering. The dealership on Altars Lane bears the name of its business partners: Daf, Iveco and BMC, while around the corner, a new second site displays the latest additions to the portfolio: Hino and MAN.
When Pelican took on Hino, it set about investing more than £1.5m in a new 2.5-acre six-bay site, with parts service, and it employs 25 people.
Richard Crump, managing director, says: "We bought a 6.5-acre plot, and [the new service site) was built in tandem with three other sites it was a development with three other buildings, which are now all sold. It was a good price because it was in sync with these other buildings. It was a scale of economies." Crump adds that the "service dealership will stand up with 1,000 hours of work [per month]". By comparison, the Altofts Lane site generates 5,000-6,000 hours of work. The addition of MAN raises the issue of block exemption, which Crump admits is great if you are the one wielding the stick, but not great if you are being hit by the stick.
"Theoretically," he says, "you can always demand this and that from the manufacturer if you meet the standards, but, in reality you need to be at one with the manufacturer or it's just not going to work.
"As a Foden dealer, we got into Daf, it couldn't keep us out on the parts business. I don't think there are many Dafselling dealers who have a parts business the size we have. Block exemption got us through the door, but we can justify our place,he adds.
Block exemption also allows Pelican to compete on a level playing field with established dealerships. "It's down to the dealer itself to make it work," Crump says.
Ken Grindod, sales director, explains that Pelican has seen natural progression. "We had a Seddon Atkinson and Foden dealership, so when Seddon was taken over by Iveco, we became an Iveco service and parts dealership.
"As a Foden dealer, which was taken over by Paccar, you went out and bought a Daf parts and service dealership, but it still dovetailed into Daf because of the Foden dealership, "When Foden shut down, we took Hino. By the same token, when Seddon pulled out, we replaced it with BMC. MAN was taken on to get work through the workshop in order to build up the service operation," he says.
Crump reiterates the importance of service. He says: "The key for any dealership is getting the right return on sale of labour, but the important most single source is vehicles on manufacturers' own contract maintenance. There is no credit collection issue, the rates are fair.
"MAN general guidelines are to get a vehicle out with a contract," he says. "They have embraced it; it's my opinion that MAN is as far into total packages, rather than just selling something on wheels, as most. The whole industry has gone that way. You've got to have a business model that is not wholly reliant on sales, that is key." •