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New truck profits give confidence
Page 53
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• Franchised dealers are confident about the prospects for the new truck market in 2002. "I think it will dip slightly in volume terms—hopefully there will be no more three-year deals around—but there should be a bit more profit in each deal that's done," says Gary Mullaney, dealer principal at Midlands ERF dealership Aquila. "And if new truck prices start to come back to a sensible level that will help the used truck market.
"What you'll find is that some customers will no longer be able to stretch to a new vehicle, so they'll start buying second-hand again instead, and that will aid residuals."
He does not expect pressure from manufacturers for a return to shortterm deals to boost unit sales; he believes their production capacity more closely matches true market demand than it did.
Launches scheduled for 2002 should keep buyers interested, he says; "ERF will have a new range, and although we'll lose some friends of the plastic cab, the steel cab will open up new markets to us."
Ged Stringer, dealer principal at Merseyside Mercedes-Benz dealership Road Range, agrees that overall volumes will fall slightly in 2002. "However Mercedes has got new
products coming along—the new Axor tractive unit for example—so, with that, plus the addition of Mitsubishi's Canter, we should be in for a good year," he says. "We've
already got one or two Axors out on trial with operators, and we're getting a good response. What's more, the service and parts side of our business is constantly on the up."
"The manufacturers are saying that the new truck market will be smaller in 2002, but I think it will be similar to zcicrr," says David Littlejohn, managing director of Surrey Iveco Ford dealership Grays Trucks. "I agree that they're becoming more sensible about the deals they are prepared to do.. they cannot afford to be bitten over buy-backs again."
Manufacturers and dealers alike are investing in improved facilities—ERF, for example, is spending 14m to enhance its network in the north of England. It has acquired its North-East distributor, Longfield Road Motors of Stockton-on-Tees, and is now refurbishing the site. The distributor's territory is being expanded to include Cumbria. The dealer there, and the new operation, will trade as ERF Northern.
The Newcastle upon Tyne dealership is being relocated.