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Bu Back

18th May 1995, Page 48
18th May 1995
Page 48
Page 48, 18th May 1995 — Bu Back
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Which of the following most accurately describes the problem?

Manufacturers once had little choice but to let the marketplace dictate the secondhand value of their products. That might have suited some but for others it's meant a much harder slog, not least when it comes to getting their dealers to be more active in the used market and keeping vehicles away from the ultimate graveyard of used reputations—the auctions.

Leyland Daf and Renault have both worked hard on their respective franchisedbased used operations. Now Iveco Ford has joined the fray with TruckSure Services (TSS), a joint venture between the manufacturer and its truck specialist dealers with the share holding split 51%/49% in favour of IFT.

The dealers' interests are represented by a company called Dealer Truck Services; some 57 IFT franchised dealers belong to DTS with each having put in an average investment of about £10,000.

TSS's key task, according to boss Bruce Allison, is to underwrite future guaranteed buybacks for trucks sold through the IFT network: "No longer will that be a contingency liability on an individual dealer's balance sheet," he says. Buyback deals are certainly increasing, especially on contract hire, and Allison predicts that some 25% of IFT sales will in future be subject to a buyback. "It's for this reason that it's vital we're able to offer an independent committed and consistent buyback service."

TSS will sell those used vehicles back to the IFT dealer network, ensuring greater control of residual values and more interest among the IFT dealers in selling secondhand trucks.

With some noticeable exceptions, few Iveco Ford truck dealers are particularly active in the used market. One of the select band is Tonbridge-based Stormont Truck, part of the Hancock Group. Stormont's used CV manager Tony Fielding has no doubts of the benefits that TSS will bring. "It's going to help us—they'll be a lot more vehicles coming back into the dealers and away from the auctions. There's currently maybe no more than 10 or 12 Iveco Ford dealers who are really interested in used trucks. But this will get others involved." Dealers will submit details of a new truck deal to TSS by fax or post stating the operational details. TSS will then issue a buyback quote within 24 hours which will stand for 90 days. IFT dealers are under no obligation to take up the offer—they can equally underwrite the buyback from an alternative source—but as Allison notes: "They then take on the liability. We're the guys that have to forecast the market and stand behind that decision."

Buybacks will be offered on vehicles returning in Iwo to five years' time. If the operator takes up a buyback offer he's expected to keep the vehicle to a pre-agreed condition at the time of return, including: no accident damage; mileage excess; at least six months MOT; all original equipment; and 7mm of lyre tread, Allison regards those conditions as "industry norms.. we also have the right to inspect the truck before the return date and if there's any dispute over condition, arbitration will take place using the Freight Transport Association inspection service or a similar expert." If the vehicle doesn't meet the criteria the operator can either put it right or pass the work on to the dealer who will then charge him for it.

Either way, says Allison "the values we write will match the return conditions."

Once a truck comes back it will first be offered to the original dealer and then to the IFT network. "That's when the dealing starts!" says Fielding. As with all buy-back operations TSS will stand or fall on the forecasting expertise of Allison and his staff. Right now, predicting where the UK truck market will be in five years time is not easy. But Allison's team will have some hi-tech help; of the £1 millionplus already invested in TSS some £70,000 has been spent on a specially designed computer databases which will analyse market trends.

Cynics would say that Iveco Ford has tried to control its residuals before—and the results were less than impressive. But with TSS the most important part of the equation—financial commitment from both manufacturer and dealers—is firmly in place. As long as the markets behave themselves, then with the current generation of vehicles TSS should give operators the one thing they're looking for. A chance to plan for the future.


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