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Used truck market goes bang
Page 96
Page 97
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Used truck sales have continued to drop away in recent weeks as dealers pinpoint rising fuel costs and the credit crunch.
While tumbleweed may not be blowing across dealer forecourts just yet, there is still no denying that used truck sales have fallen off in recent weeks.
"It's solely the consequence of high diesel prices," says Dave Morgan, used sales manager, western region, at Scania dealership Keltruck. "Hauliers have secured work, but they can't afford to do it because they can't get the rate increases they need to cover the rising cost of fuel. Some of them are even packing up as a consequence."
Operators are looking back wistfully to the days when diesel was LI a litre, Morgan suspects, even though there was uproar when it first hit this magic figure.
"We're ticking over at present," says Barry Browning, used commercial vehicle sales manager at Andover, Hants Mercedes-Benz dealership Pentagon. "We're certainly not as busy as we were during the first quarter of the year."
"It's exceptionally quiet, and I must admit I've had a very poor month," says Nigel Sharp, in charge of the Barnsley used truck operation at Daf dealership F&G Commercials. "Having a lot of bank holidays bunched up close together doesn't help either, because each one disrupts business for a fortnight."
Both Sharp and independent dealer Chris Hart, managing director of Blackrod, Bolton-based Trucks 2 Go, point to the number of vehicles being repossessed. "A lot of hauliers are going under, and I'm having quite a few operators ringing me up trying to sell me trucks," Sharp reveals.
Not all doom and gloom
Yet while dealers admit that business has declined, nobody is saying that the bottom has fallen out of the market completely.
"At one point, things went totally dead," says Lee Smith, a director of West Thurrock, Essex-based independent dealership Hanbury Riverside. "I think customers were shell-shocked by the combination of the high cost of diesel, the credit crunch and general economic uncertainty. In recent days, however, we've seen business picking up a bit." Catering for a diverse market, Trucks 2 Go is still making sales, explains Hart. "We've sold a real mixed bag of stuff recently. Everything from vans and roadsweepers to six-wheel rigids with cranes on," he says. "What we're not doing, however, is selling lots of tractor units. Demand has really fallen off."
A shrinking market means that more stock is available, with tractor units, in particular, in freer supply. With lots of vehicles suddenly appearing after a long famine, there is, of course, the danger that some dealers will behave like children in a sweet shop and grab everything on offer. It is a temptation they should resist, advises Matt Hammond, used vehicle sales manager at West Thurrock, Essexbased Harris Daf.
"Don't buy stuff just because it's available," he says. "Be sensible, and exercise a bit of caution."
Exports are strong
Also, it isn't the case that all types of truck can be picked up easily. For example, there are still too few 18-tonners around to meet the continuing demand. -There certainly aren't all that many bodied as curtainsiders about," comments Morgan.
"I recently took three in on 06 plates and I've only got one left," adds Browning. "Customers want examples that are no more than three years old with sleeper cabs and tuckaway tail-lifts. They know that if they order a new one, they could be waiting for delivery until mid 2009."
Dealers report that while lead times remain an issue, cancelled orders mean that new tractor units are increasingly becoming available — assuming the customer is not too fussy over specification.
There's no indication of a collapse in the part-exchange values of older trucks, Morgan says. "The export market is still busy, so if it's something that can be sent overseas, then we can give good money for it in order to get the customer into a newer vehicle," he says.
"We're finding that 2001/2002-registered stuff that's still got a bit of life in it continues to sell," Hart observes, Price is an influencing factor here. "A customer might be willing to commit himself to a £15,000 truck, but if you're asking him to spend £40,000 on something a bit newer, that's a different matter," he remarks.
The values of recently registered tractor units are dropping, Sharp reckons. Hart agrees: "I think they've declined by several thousand pounds since Christmas." •