LOW-COST START-UPS ARE KEY
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Renault Trucks UK more than doubled its used sales last year by focusing on maintenance and low-cost start-up packages for operators.
Commercial director Nigel Butler says the manufacturer sold more than 700 units in 2009, doubling its numbers from the previous year. "We worked hard with the network and focused on what a used buyer wants: lower risk and lower start-up costs," he says.
"We are also producing more dealer-prepared, better-quality vehicles." The Premium 6x2 tractor with a £213-a-week maintenance package has been the driving force behind the rise in sales, so much so that Butler did not have enough trucks to supply demand.
Another factor is the decision by banks and finance houses to withdraw from the asset management market allowing Renault Trucks Financial Services (RTFS) to become the manufacturer's primary source of funding, representing more than 60% of the trucks sold through TruckPlus.
Our focus has been on developing low-risk, low-cost packages, and we can do that with RTFS because that is all it does, finance trucks," he says. Haulers have been keen to take advantage because working capital has been difficult to accrue over the past 18 months. "Operators like to pay for trucks while they are working with them, rather than use working capital, which is difficult to build up," he says.
Butler believes Renault Trucks will do the same amount of business again this year, and he has the right number of buy-back and leased vehicles coming through to support it without seeking stock from the market.
"We have more 440s coming through, with 450s starting to come through mid-year," he says.
He agrees with Renault's competitors that residuals will rise on late-year used vehicles because of the price increases on new stock but also because of the state of the market three years ago.
"Looking back at registration, in 2007 we couldn't get hold of vehicles, where 2008 was a bumper year, and 2009 was down again. So, we have had two out of three years where registrations have been below average.
"Two things happen when you are coming out of a recession: one, rental gets busier because people don't want to own vehicles; and two, used markets get busier because people don't want to spend too much money," he says. Further finance packages will include low interest rates on older stock to help get them into the market quicker.