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Sign's of life
Page 60
Page 61
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The used market is by no means dead, there are still signs of life, but traders are being very selective about what they buy
Words: Steve Banner Every cloud has a silver lining, and in the case of the used truck market, it is the improved availability of stock.
"Nine to 12 months ago, all dealers were struggling to obtain good. clean vehicles," says Mike Curtis, Worcesterbased used truck sales manager at Daf dealership Watts Trucks. -Nowadays, there are so many used tractor units about that you can practically specify the colour you want:'
Some of the vehicles that are becoming available are being disposed of by hauliers who are either scaling back their activities or leaving the industry.
"I'm getting quite a number of phone calls from operators asking me if I'd like to acquire their trucks," he reports.
-If you're buying trucks for stock then there's certainly plenty of choice," agrees Barry Browning, used commercial vehicle sales manager at Mercedes-Benz dealership Pentagon in Andover, Hants. But he warns that some of these trucks may be a bit on the expensive side because the vendors acquired them when the market was at its peak and are pricing them accordingly.
Confronted with all this choice, dealers are being selective about what they buy. In the current climate they have no wish to be left with too many unsold vehicles on their hands.
"I'm certainly being cautious about the number of tractor units I stock at present, and I'm happy that what I've got at the moment owes me the right money," says Matt Hammond, used vehicle sales manager at West Thurrock, Essex-based Harris Daf.
Wariness
"A lot of operators are making do with the vehicles they've already got." Curtis observes.
"Used van sales are doing pretty well, but sales of used heavy trucks are slow at present," comments Browning.
'it's quieter than we expected it to be," says Keith Ottley, sales executive at Volvo dealership Crossroads, which has a used truck operation in Scunthorpe.
-Up until recently the trade had a lot of customers and a shortage of trucks. Now the situation has reversed itself and we're being very careful about what we buy.
"We've got to keep a close eye on stocking levels in the present climate. We don't want to be left with a yard full of trucks we can't sell which is the situation a lot of people are in.
"That said, last year was a boom year and the reality is that we're probably back to the level of business we were doing two years ago."
It is no longer the case that sales of late-plate tractor units are being buoyed up by the lack of availability of new chassis. "There are more new vehicles about and lead times aren't as bad as they were," Curtis says.
Specialising in rigids. and 7.5-tonners in particular, Oldham-based independent dealership Mancunian Business Vehicles says that it has seen sales drop sharply since June. Customers such as scaffolders have been hit particularly hard by the problems besetting house construction, but so has everybody else connected with the building industry: everybody from companies making bricks to retailers who sell furniture.
Prices of 7.5-tonners have fallen by up to 22,000, it reports, and slow sales have prompted it to rent out a number of its used trucks.
"Prices have come down across the board we saw a big downturn during the early to middle part of the year and it's interesting to note that people with the work and the cash are taking the opportunity to buy,Hammond says. "I doubt that prices will fall any further though. I think they've settled down now."
Despite the well-publicised turmoil in the financial markets, few dealerships say that their clients are finding it difficult to raise funds.
Mancunian says that getting a loan is not a problem for most of its customers: the question is whether they have sufficient confidence to commit themselves to making an acquisition or not. It suggests that one consequence could be the demise of a number of small finance brokers around the country because if clients are not prepared to borrow, the brokers will not be making any money.
"I keep hearing that nobody is prepared to lend money, but that's not my experience," Hammond says. -I've not failed to finance anybody yet.
"What's more, the cost of borrowing hasn't gone up all that much and finance agreements are being sorted out quickly.
Unwillingness
One trend that is holding up sales is the growing unwillingness of many traders to underwrite some of the older partexchanges being offered to dealers. says Curtis.
"Many traders are already overstocked; Browning remarks.That can put used truck sales staff in an awkward position, as one salesman observed.
"You find you're under pressure from
the bosses to get an old vehicle one that nobody really wants underwritten because it's being part-exchanged against a new truck and they want the new chassis out of the yard." he says. "What usually happens is you manage to get shot of the new one, but you've got the trade-in sitting in the yard instead because nobody will underwrite it and you can't sell it either."
Nor are those old trucks likely to be exportable given that overseas markets are more interested in later-registered vehicles, and not all export markets are as buoyant as they once were.
"We're still doing OK, but we've seen a major fall in inquiries.says Paul Mercer, joint managing director of used truck exporter Britcom International, which is based in Market Weighton, East Yorkshire. "It's a reflection of the fact that the financial crisis is a worldwide one."
"The used market is not a disaster, and it's not time to hit the panic button." Hammond observes. "I think though that the next 12 to 18 months will see a lot more caution on the part of both dealers and operators before they commit themselves to spending."