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Enhanced profit potential is enticing an increasing number of OEMs to exploit the huge market for used light CVs By Steve Banner
SURPRISINGLY few franchised van dealers exploit the huge market for used light commercials to the full despite the multiple profit opportunities it presents. "Some are exceptionally good, but others have what is best described as unfulfilled potential," observes Ford sales director Andy Barran. It is an area Volkswagen Commercial Vehicles is aiming to address so far as its own network is concerned, with the extension of its Das WeltAuto approved used vehicles programme to its UK-wide network of van centres. "We want to enable them to sell used light commercials customers can trust," says head of sales Andy Waite. Embracing all makes of vehicle, subject to condition, that have covered less than 100,000 miles, Das WeltAuto includes a 12-month warranty with UK and European
emergency roadside assistance thrown in. There is also an initial seven-day
complimentary Volkswagen insurance package. All the necessary technical checks are carried out prior to the van being sold, along with its mileage and history.
And should the vehicle break down or have to be repaired under warranty, a replacement will be provided until the problem is resolved.
Part-exchanges can be accepted against vehicles sold under the scheme, regardless of their age or mileage. A right of exchange policy
Customers can avail themselves of what Volkswagen describes as a right of exchange policy, which means the vehicle can be returned to the dealer within 30 days or 1,000 miles of delivery (whichever comes sooner) if the buyer has reason to be dissatisfied with it. Volkswagen has also put together a variety of finance packages — leasing agreements as well as HP — and service plans tailored to meet the needs of the used buyer. Such a powerful package should help boost second
hand sales through the Volkswagen network, especially when one considers the popularity of Transporter in the used market. One well-known website that advertises light commercials for sale recently reported that the only second-hand van that attracts more enquiries is Ford's Transit, which sells in far greater numbers when new than the Transporter does.
However, franchised van dealers face a number of difficulties when it comes to tackling the used sector, says Sandy MacRitchie, marketing manager, commercial vehicles, at Vauxhall — and one of them is space.
"Unless they have a lot of room on their site, they can struggle to put together an impressive second-hand display, particularly if they are sharing the site with a car franchise," he says. The cars might squeeze out the vans although the latter, like the former, can be offered for sale over the internet.
Obtaining good-quality stock can be a challenge too, adds MacRitchie, and much of that might be down to the strength — or otherwise — of the manufacturer's finance operation. If its funding packages have achieved a respectable level of penetration in the new van market then dealers could find they get a steady stream of desirable threeto-four-year-old vehicles fed back to them, he says. Take care of your vans
Assuming that those vehicles have been well looked after and regularly maintained under a manufacturer's servicing agreement, then they will be ready to retail.
The size of Volkswagen's finance business — one of the biggest in Europe — and the number of van centres run as stand-alone operations would appear to give it an advantage on both counts. Citroen Contract Motoring is also able to generate stock for Citroen van dealers, according to Scott Michael, the manufacturer's head of CV sales and business centre programme.
"It has got two-year contract of hire deals available," he says. "When those vehicles come back they give our dealers a nice, balanced portfolio of stock along with the threeto four-year-old models they've also got available, at a time when the demand for used vans is high."
All networks contain dealerships of varying sizes, and smaller outlets might be wary of engaging with the used business too closely, according to MacRitchie, for fear of getting it wrong and catching a financial cold.
"While they may be relaxed about retailing a secondhand Vauxhall Corsavan or an Astravan because they will be familiar with the cars from which they are derived, they may be rather more nervous about selling a Movano tipper," he says.
The tipper is more complicated and might have led an arduous life in the hands of its previous owner.
Such caution is likely to be greater if dealers have to go out and buy in stock rather than simply rely on an in-flow of ex-contract vehicles, ex-demonstrators and partexchanges, which might or might not be suitable for display on a franchised dealer's forecourt. Lack of experience
"They may not have the experience or skill that is required and they may be frightened of getting it wrong and losing a packet," says one industry insider.
Something that might tempt franchised dealers to engage more in the used business is the ability it gives them to fit and sell profitable extras. Second-hand vehicles may offer more potential in this area than brand-new ones. Volkswagen is suggesting a number of approved optional extras that can be fitted to each Das Welt Auto van its dealers advertise. They include practical ones such as parking sensors, as well as cosmetic ones such as alloy wheels, and the
prices quoted also cover the installation costs. Barran says many of the afters ales support services offered to
customers who buy new vans are applicable to secondhand ones too, such as Ford's Service Activated Roadside Assistance programme. Have your Ford van undergo its manufacturer's scheduled service at its dealership and it will be covered by a free emergency roadside rescue and recovery scheme in the UK and the rest of Europe until its next service is due. It also responds if the driver has lost their keys or put the wrong fuel in the tank: and buyers of second-hand light CVs are just as likely to make those sorts of mistakes as those who buy new ones. •