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The war of the Leftovers

24th June 2010, Page 64
24th June 2010
Page 64
Page 65
Page 64, 24th June 2010 — The war of the Leftovers
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Which of the following most accurately describes the problem?

Keywords : Fiat, Iveco, Truck, Scania, Bus

As operators tentatively step back into the used market, it seems they may find themselves battling over available stock.

Words: Steve Banner

Demand for second-hand trucks is getting healthier. "We feel that the tide has started to turn," says Lee Smith, a director of West Thurrock, Essex independent dealership Hanbury Riverside.

"The job is definitely on the up," agrees Jonathan Bownes, sales executive at Volvo dealership Thomas Hardie's Middlewich, Cheshire, used truck centre. "I wouldn't say customers are actually battering on the door, but 1 can certainly see them charging down the road towards us."

One reason why sales are increasing, says Smith, is that operators who have put off replacing their existing vehicles for longer than they would usually do have decided that they now have no option but to buy. The alternative is to try to soldier on with ageing equipment that is becoming increasingly unreliable. Another factor stimulating the market is the high price of new trucks.

"Hauliers are asked to pay £80,000 to £90,000 for a new tractor unit and the repair and maintenance package that accompanies it may not be quite as comprehensive as it used to be," he says. -They feel more comfortable paying £45,000 for a lateregistered example instead."

A third factor boosting sales is the demand for used Euro-4 vehicles. as operators who venture into London regularly realise that they will face financial penalties if they send a pre-Euro-4 truck into the Low Emission Zone (LEZ) from 3 January 2012 onwards. As a consequence, the gap between Euro-3 and Euro-4/Euro-5 prices is increasing. "It's growing wider month by month," says Paul Evans, director, used vehicle operations, at Iveco. Smith adds: "Euro-4 and Euro-5 trucks will be big news for the next 18 months, however, because of the LEZ, and I'm already getting main dealers ringing me and asking if I've got any."

Tough to find good quality stock

Smith is in the process of acquiring a significant number of 07-, 57-, 08-,58and 09-registered DAFs,Scanias and Volvos in a bid to help satisfy the rising clamour for product. Most dealers, however, face the same problem; they are finding it difficult, if not impossible, to obtain good quality, retailable stock.

"It's not impossible to find stock, but it's not easy," says Jamie McDonald, who runs f3esthorpe. Norfolk-based independent dealership RIM Commercials He has diversified into selling vans, pickups, trailers and plant as well as trucks, "We've got the customers, but we haven't got the vehicles and we're having to work hard to get them," says Paul Diamond, used sales specialist at Mercedes-Benz dealership Road Range, with branches in Liverpool, Llandudno and on Deeside."It used to be the case that we could drive over to Barnsley where Mercedes keeps its stock of ex-contract used trucks and pick out whatever we wanted," he continues. "It's not like that any more."

That is because the cupboard at Barnsley is looking rather bare these days. Other manufacturers are short of ex-contract trucks too, often because operators have hung on to them for a year or two longer than they would usually have done. Those that have appeared and are retailable have been snapped up quickly.

-It's not easy to find decent used trucks and it's a struggle to get hold of ex-contract stuff," says Nigel Sharp, used vehicle sales manager at OAF dealership F&G Commercials.-That said, there appear to be a fair few XF105s around."

F&G operates sites in Huddersfield, Barnsley and Oldham. "There's an enormous lack of threeto five-year old trucks," says Bownes at Thomas Hardie. "There are hardly any about, and Volvos and Scanias are in particularly short supply."

He has, however, been able to lay his hands on around 50 ex-contract 03to 56registered vehicles, primarily rigids, but including one or two units, from half-a-dozen or so well-known fleets. "The rigicls are a mixture, including box vans, curtainsiders and flats," he says.

Bownes explains why used sales are buoyant: a lot of hauliers arc remarkably busy and need vehicles. "That's as true of people who are shifting beer as it is of people who are shifting bricks," he says. -I've had people practically lighting over a six-wheeler with a brick crane on it.

-Many people are starting to expand their fleets again after three years of cutting back."

The stock shortage and the level of demand means that used truck prices are rising. "They bottomed out last October and have been creeping up ever since," he says.

Some customers still believe that they can buy vehicles cheaply, but that's not the case," says Diamond at Road Range. "Euro-4 trucks are fetching good money" Smith believes that the rise is set to continue for some time to come."I think prices could go up by 10% to 20% over the next 12 to 24 months," he observes.

Low new truck sales over the past couple of years mean that fewer second-hand ex-contract vehicles will he offloaded onto the market when disposal time rolls round; and the shortage will make them expensive.

"Remember too that used prices are dictated by new prices," says Smith. "If the latter go up, then eventually so do the former."

One or two used truck specialists are sounding a slight note of caution, however. "Enquiries have slowed down a little since the start of April," says Evans at Iveco. "We're not receiving quite as many phone calls about vehicles as we were. "Perhaps the price of diesel is having an impact or maybe it's because some operators are still finding it difficult to obtain funding." he continues. "I should of course stress that Iveco Capital has money available."

Meanwhile, Paul Prewett, general manager, used sales at east of England Scania dealership TruckEast, says: -Business is doing OK, but it would be wrong to say that it's absolutely flying. Some operators are still a bit indecisive; a bit wary of committing themselves to trucks. As for stock, it's still available if you know where to look: no matter what people may say" He agrees that there will be a major shortage of late-registered used trucks in two or three years' time: -Operators may react by switching back to new, but financing the deal over six or seven years rather than three or four. Even at six or seven years of age, a Scania is still worth something." •


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