"Speak to any used dealer and you'll find him concerned
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about the ease with which operators can get a new truck."
Can anybody say a good word about the commercial vehicle market? Those hard-nosed individuals who work within the trade naturally demand the unvarnished facts. But in such a fragile marketplace, and with the traders' basic instinct being to push used values ever lower, perhaps it's time to acknowledge some of the economic facts of life.
Inflation and interest rates are at their lowest points for many years and with the availability of relatively cheap labour, the UK is doing well compared to the rest of Europe. All that promises reasonably good trading conditions over the coming 18 months. But will that promise be delivered? Significantly, the chassis manufacturers are reporting a rapid slowing down of forward orders with product levels falling back during the first quarter of 1996, For used truck dealers there are other, darker clouds on the horizon. Speak to any used dealer and you'll find him concerned about the ease with which operators can get a new truck on a very attractive lease. As one Scottish franchised used dealer noted recently: "It's becoming easier to operate a new leased truck than pay £20,000 for a good used vehicle." With the reassurance of a new vehicle warranty and reliability behind them, who con blame operators who take the leasing option? However, many operators—and their accountants—aren't even willing to go that far, preferring to look at low-cost, short-term rental or contract hire deals.
Just how low can they go? Well probably far lower than they are now, judging by activity in the artic sector. Adverts in the national press proclaim weekly rental rates on one-year contracts that beggar belief. These rates are certainly value For money but play havoc with residual values for all competing heavies. Many used dealers have already lost business to such deals and the question to be asked is what's going to happen when all these trucks come back into the used marketplace—assuming that the operators of those ex-lease/rental/hire trucks don't want them.
If the economy does slow down between now and the next election will even more stock be heading For used dealers who are already having a hard time disposing of existing stock?
For the haulier who does want a good quality used vehicle it's likely to mean more choice, at better prices. But for the manufac
turers looking to maintain residual values it's going to create problems. Is volume really the chassis manufacturers' key to success? But what of the used market? Laying cables has caused a lot of traffic congestion across the country and inflicted even greater hardship on those tippers and vans currently on the job. Many vehicles are reported to have nearly as much asphalt in their cabs as ever graced their now hard used bodies! Such vehicles are to be seen around the country, often newly registered and on short-term rental/lease agreements, looking old before their time. These ugly ducklings will be entering the used market before long and are unlikely to attract much interest. Fortunately there is no surplus of heavy tippers or specialist multi-axle vehicles: right now few dealers have the nerve to hold such stock over the winter.
As with lighter trucks and tractors, dealers are simply unsure how to value even popular models where no customers are waiting in the wings. Of course, what is cheap today might seem over the top in two weeks' later. This caution will slowly disappear as the new year gathers speed and the first deals are put to bed.