Used stock is running out
Page 48
Page 49
If you've noticed an error in this article please click here to report it so we can fix it.
CM talks to several used truck centres and finds everyone is having a hard time finding appropriate stock
Words: Steve Banner
The current severe lack of retailable used trucks could continue for at least the next 12 months and possibly for the next three or four years. So says Jonathan Bownes, sales executive at Volvo dealership Thomas Hardie's Middlewich, Cheshire. used truck centre.
One reason for the lack of vehicles is the decision by many major operators to extend their leases rather than release trucks onto the second-hand market. "If somebody with 100 vehicles wants to extend, then that's 100 can't get my hands on," he observes.
"Traditionally, the majority of the vehicles we've sold have been ex-contract and sourced either through Volvo or through ourselves," Bownes continues. "However, the number of lease extensions we're seeing means that we may have no choice but to go out into the market and buy more actively over the next couple of years. At present, we're not active buyers to any great extent."
Paul Evans, Iveco used vehicle operations director, says: "Prior to 2008, lease extensions were usually for no more than two or three months. Now it's more like 12 months."
"I think the stock shortage is going to get worse," says Lee Smith, a director of independent dealership Hanbury Riverside, based in West lburrock, Essex. "1'm constantly getting calls from dealers, including franchised dealers, who are trying to buy stock from me."
Meanwhile, Tony Bevan, general manager, sales, at MAN's TopUsed operation, says: -Frankly. I don't see the stock situation improving much in 2011. We're actively buying in the market from sources such as operators, finance houses and administrators — we're buying at auction too — but we're still not getting enough trucks to satisfy the demand, even though we're giving good money.
"At present, it's not so much about what people want, it's more about what they can get."
Another reason for the shortage is the low level of new truck sales. If vehicles are not sold new, then by definition they cannot be sold second-hand, and the high price of new chassis is driving more operators to opt for late-plate used examples.
As a result they are becoming even thinner on the ground than they were previously.
Nothing about -The shortage is such that I'm pre-selling trucks even before they've been taken off the road by the existing owner," says Smith. "I'm certainly finding that some people who used to buy new are buying used instead.
"New trucks are so expensive these days that it's becoming difficult for some operators to finance them," he adds. "With a used one, it's not so bard and it'll still he able to do the same work."
"There aren't several hundred late-plate trucks hidden away on an airfield somewhere," Bownes observes. "Those days are long gone. There's nothing about."
"As things stand, I've got 56-plate tractor units in stock, but nothing later." he continues. "I'd like to he able to offer more of a choice, but I'd like to see the Taj Mahal in my back garden too, and I somehow think that's not going to happen either."
This shortage is driving prices upwards. "They're hardening, there's absolutely no question about it," Bownes explains.
"They're firming up," says Smith. "They're certainly not dropping."
"As Our stock goes down, the prices rise," says Evans.
"That's especially the case with trucks that meet the Euro-4 standard for particulates," he continues. "They're going up and up in value because they'll he the only ones that will be able to enter the London Low Emission Zone front January 2012 onwards without attracting a penalty.
"Unfortunately, we don't have enough to satisfy the demand."
Positive feeling
Bevan adds:-We're seeing 58-plate TGX tractor units fetch £50,000, TGSs andTCiLs are going for strong money too, as are TGMs."
The price rise is mirroring the increase in enquiries as dealers report increased traffic.
"Business has bounced along nicely over the past three months," Bownes says. "I'm getting a really positive feeling about things from hauliers."
"We're seeing customers come back into the market who have hung on to their trucks for two or three years longer than they would have done normally," says Smith.
Operators who work for the construction industry report that they have got busier, according to Bownes.
"Anybody shifting sand, gravel, and so on seems to have plenty of work on so far as I can see," he adds.
HOW IVECO IS BEING AFFECTED
A lack of stock is one reason iveco is shutting its 12-acre used truck centre at Hawarden in Flintshire and shifting activities to a smaller, six-acre operation next to its parts warehouse at Winsford in Cheshire.
"We've got just under 300 vehicles in stock at present, but I expect we'll have significantly fewer by the end of the year," says Evans.
"By October 2011, we'll probably have no more than 100. We certainly don't expect our stock levels to grow over the next two years, and as things stand we can sell whatever comes in very quickly indeed.
"We could sell three times the number of vans we've got available for example." "We're certainly getting more enquiries for eight-wheelers than we've had for a long time."
However, he would not rush out and purchase them in large numbers, even if they were available,"! might buy the odd one, but I still feel that it's a sector where it makes sense to be cautious given how far it has fallen," he says.
Pushing retail prices up to astronomical levels to take advantage of operators desperate for vehicles might be tempting, hut it would be unwise. Hauliers have long memories.
"We price our trucks sensibly," says Bownes. "We're not like Dick Turpin."
One advantage of buying used is that the truck can he put to work immediately. That is not the case with new vehicles at present, says Bevan.
"There are few new chassis available ex-stock," he continues. -Odds are that you'll have to order the one you want and you'll have to wait a while for delivery."
It is unlikely that you will be seeing it this side of Christmas, he adds. a