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'Why aren't more manufacturers tapping into that expertise and creating partnerships?' _
Page 47
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Are the manufacturers getting a firmer grip on the used market? During recent weeks the signs have been ever more apparent. MAN has set up what it describes as a "Vehicle Management Centre" at its Swindon HQ, headed by David Drake, formerly of TruckSure Services—the company that guarantees residual values to the lveco Ford Truck network.
Drake says the aim of the VCM is not to
replace used truck dealers it will supply units to dealers or traders as well as providing direct sales to operators. "We're interested in buying anything, late model, clean with MAN on it." Why would they want to do that? Because like any other manufacturer, MAN wants to have greater control on its residuals so a central used purchasing and distribution site should deliver just that.
Things have also been happening at Commercial Vehicle Contracts, the Bicesterbased company which underwrites residual values for Leyland Daf. Up until now CVC only underwrote new vehicle residuals. Now its guarantee writing has been extended to include used vehicles. According to John Ash, general manager of CVC's RVG operations, the move is designed "to help the approved Leyland Daf used dealers retail more used trucks into the market". The move is restricted to vehicles which shouldn't be more than seven years old by the time the used residual guarantee falls due.
It certainly encourages Leyland Daf's network to deal more in used trucks secure in the knowledge that CVC will handle the risk on the residual. It also allows a dealer to offer an operating lease on a used truck for the period between the time it comes back from the first "owner" up to the end of the guaranteed buyback period again knowing that they have a firm residual For the vehicle in place should they need it.
ID and MAN aren't the only ones cranking up their used truck retailing programmes. Scania is close to unveiling a new scheme which will presumably give it greater control on what happens to the large number of trucks returning from big fleet customers such as Tesco. More news soon.
Mercedes-Benz has decided to import some well-known independent expertise into its used truck operation. Kevcm Brandrick has been brought in to head a soon-to-beestablished Midlands-based national used truck retail centre which will operate alongside the company's existing Wentworth Park
operation. It's expected to open its doors for business sometime during the first quarter of 1997. It will not only provide a sales outlet for vehicles coming off M-B's Charterway contract-hire and leasing operation but will also buy and sell used vehicles in the open market.
What's been the independents reaction to all this activity? Many still doubt that there is sufficient commitment within the total franchised dealer network to ensure that the full potential of all these schemes are realised. They also point out that while there are several franchised dealers who are strong used truck retailers, they've always been that way and have never needed such schemes to encourage them. The battle is now for the hearts and business minds of the rest, trying to convince them that there's money to be made by retailing used vehicles.
What is clear is that marketing schemes alone won't convince those dealers who are nervous of entering a market in which they have no experience—or cashflow. Who does have that experience? The independents, naturally. Which begs the question why aren't more manufacturers tapping into that expertise and creating partnerships? Answers on a postcard...