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Surplus of 6x2s will deflate prices

20th December 2001
Page 52
Page 52, 20th December 2001 — Surplus of 6x2s will deflate prices
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Which of the following most accurately describes the problem?

• A glut of used 6x2 tractors could be bedevilling the industry in a year's time, warns George Alexander, chief editor, commercial vehicles, at G/ass s Guide: "The market could end up with more than it

can handle thanks to the way the government has confused everybody over VED rates. However, I don't think we'll reach the stage where people start removing axles and converting them to 4x2s."

The 6x2 surplus is likely to drive 4X2 values down too, he adds, because of the price differential that has to be maintained between the two configurations. But traders shouldn't start panicking, he stresses: "People should simply monitor the trend rather than throw a wobbly over it."

Otherwise, 2002 could be a good year for used sales, Alexander suggests. "We've got low interest rates, a stable economy and low inflation," Alexander points out. "What's more, manufacturers

are moving away from doing shortterm, high-volume deals that wreck residual values and are starting to do deals that make sense."

He suspects some operators may be switching away from leasing vehicles, and are buying them outright instead, but reckons that this option is really the preserve of the big fleets as small hauliers battling with tight margins don't have the cash.

"It would be better if more firms reverted to ownership because it would lead to a healthier balance in the market," Alexander suggests.

How about trailers? New prices have continued to fall, yet the prices realised by clean used ones remain healthy, he reports: "Tippers, flats, and skeletals will sell all day long if they're nice examples," he says. "However, tired old trailers will sell solely for the value of their axles, and it's amazing the number of people who make a living out of pulling axles off trailers."

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