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The credit crunch blighting the UK has not diminished the
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demand for clean, late-registered vans. That's good news for dealer chain Renault Retail Group...
Words/images:Steve Banner
House prices may be plummeting as the credit crunch bites, food prices may be increasing, and diesel prices may be hitting the stratosphere — but the appetite for clean, late-registered vans shows little sign of abating.
It is a point not lost on dealer chain Renault Retail Group. Owned outright by the car and van-maker, it boasts 23 outlets and has a presence in several key cities, including London, Birmingham, Manchester and Liverpool. As well as selling around 5,500 new light commercials annually — equivalent to roughly 28% of Renault's total UK light CV volume last year — it carries a stock of 350 to 500 second-hand vans, and last year, it sold 571 used products.
"Our used customers are often local tradesmen who don't want to acquire a brand new vehicle, but are looking for a sensibly priced used example that they'll keep for, say, five years, rather than run into the ground," says managing director Ian Plummer. "They're also interested in the warranties and the quality guarantees that a franchised dealership can put in place."
Around 80% of the second-hand vehicles the group retails are from 12 to 24 months old. "They've typically covered from 20,000 to 40,000 miles," says fleet sales manager Michael Cliff.
Such vans are likely to appeal to firms on local collection and delivery work, to hauliers looking for a workshop runabout, and to electricians and plumbers.
Fully protected
Everything is sold with a 12-month warranty, and many of the vans are protected by the unexpired portion of the maker's guarantee.
Extended warranties can be purchased, too. "What often happens is that the customer will seek to match the warranty package to the duration of any finance deal he's entered into," Plummer comments.
Renault Retail's second-hand vehicles arrive from a variety of sources, but all will have been regularly maintained. Some of them are ex-contract, while others were previously operated by the group's service and parts departments.
Some have been disposed of by the company's rental fleet, and will be no more than six months old. That does not mean to say they are low-mileage, though. They may have clocked up as many as 20,000 to 30,000 miles during their short lives in the demanding world of self-drive-hire.
"If our rental operation has been doing its job properly. they'll have been out working most of the time," Plummer remarks.
While Renault Retail welcomes part-exchanges, it does not always wish to market them from its own forecourts, says Cliff.
They may be five to six years old or more, with mileages into six figures on occasions, and consequently do not fit the company's stock profile. In some cases, they may be undesirable because the reason why the customer wants to acquire another van is that his existing, long-suffering vehicle has finally expired or cannot pass its MoT without a lot of expensive remedial work.
Distress purchases
Under those circumstances he is going to need a replacement in a hurry. "A lot of the used light commercials we sell are distress purchases," Cliff observes.
Part-exchanges, whose age and mileage prevent them from being sold from one of the firm's franchised dealerships but which could still represent a good buy, are marketed through the group's Autoworld all-makes used vehicle supermarket site. Based in Willenhall, near Wolverhampton, it gets first pick of whatever part-exes come in. Plummer aims to set up a number of similar operations at various locations around the country Any that Autoworld cannot retail — "we prefer to retail part-exes if possible," says Plummer — are packed off to auction at BCA's Walsall site, or, in a few cases, traded out. Many of the part-exchanges taken in will not be wearing a Renault badge. That is not a problem if they are being despatched to Autoworld, or to auction or to a trader for that matter — but is Renault Retail willing to display anything other than Renaults at its franchised branches?
While the group is not averse to selling the odd lateplate low-mileage Ford Transit, for example, from its dealerships, it has to be particularly attractive to justify its place in the line-up.
Customers do not come to Renault dealerships looking for Fords. Plummer reasons, so, unless that Transit is good enough to justify star billing on the forecourt — or the website — it is likely to be offloaded through other channels.
Service income
There is also the point that a Renault is more likely to he serviced by the dealership concerned, generating valuable service and parts income, than a Ford. That said, the group is happy to service all makes, says Plummer.
The website has become an increasingly important source of business in recent years. Each dealership has access to all the used vans stocked throughout the group, so if a customer in Birmingham is interested in a van that he or she has seen on the site that happens to be in Manchester then it can be delivered to the Birmingham dealership for inspection.
Transporting vans around the country is, of course, an expensive exercise, so the salespeople have to be pretty confident that a sale will be achieved before a transfer is arranged. "It costs £.100 at least to move anything anywhere these days," says Plummer; expensive diesel is helping to inflate the bill. in