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Not just an
Page 72
Page 73
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By paying attention to aftersales and nurturing its used business, North East Truck & Van has stayed
at .0p...forefront of the CV market
Kevi eports.
When Leyland Daf went into receivership 14 years ago it was a bombshell for its flagship dealer North East Truck & Van (NETV), although the passing of time has allowed managing director Sandy McDonald to be more reflective. "You're never going to believe a manufacturer would go bust," he says."We knew Leyland Daf wasn't in the best of fmancial health, but no one thought it would go into receivership."
Rather than sit by and wait for the dust to settle, NETV jumped ship. Two months after the bombshell dropped, it had become a fully stocked Iveco dealership. "We lost some cash through the receivership, but NETV has always been good at coping with change. As a 30% market-share Daf dealership, it was a strong decision to move to a manufacturer with poor market share in our territory.
"We felt lveco would be a major player—across Europe, not just in the UK — willing to invest in new product. During the transition we made no one redundant, we didn't lose money [profit], and everyone kept focused."
Customer loyalty was tested, but McDonald feels loyalty had more to do with the services NETV offered than with what it had on the forecourt."We were strong in aftersales and had a 100% conversion rate in our areas," he says.
With 300 new sales in 1993 the task of expanding the business was aimed squarely at aftersales, says McDonald, and over the years the turnover it has provided has grown steadily: from £9m in 1993 to £14m in 1998 and £21m in 2005.This is despite company turnover falling £3m from 1998 to 2005, down to £75m.
"Fleet deals can depend on whether you are flavour of the month, whether the demand is there,and on the pricing structure;but one thing you can control is the aftermarket."
As more dealerships were added through acquisition of serviceand-repair outfits in Lincoln and Scunthorpe, aftersales expanded organically. "Our strength is looking after vehicles throughout their life," says McDonald. "My long-held aim for viability in this industry is aftersales and the strength of aftersales is in customer management."
As well as working to increase aftersales following the switch to Iveco,NETV also concentrated on the used market. Director of used sales Cedric Carrick joined 13 years ago charged with developing the used department. "There was a yard full of Dafs when I firstjoined," he says. "It took two years to get the house in order and develop a strategy."
Before entering the truck trade Carrick had spent 15 years in acquisitions for Robert Maxwell, which involved buying 3,000 cars, vans and trucks for the Mirror Group. But even with that experience, the nature of the used industry took him aback."It was very Arthur Daly when I joined.The used market [in general] has always been seen as the poor relation,it wasn't taken seriously until about 10 years ago."
Emphasis gradually moved from selling part-exchange to purchasing stock for retail, and the NETV used department came of age in 2000. It also started to use buyback as a way of meeting its own needs rather than bumping up sales figures.This countered the shortage of desirable three-year-old stock available to fill under-supplied categories, such as 3.5-tonners currently.
The lack of desirable motors stemmed from a shortage in sub7.5-tonne stock in 2000 with people hanging on to vehicles too long. "Fiveyear-old stock is too long in the tooth for retail, so concentrated buyback was introduced," says Carrick.
Buying from the open market and from customers means most stock is bought and paid for— the majority of attractively offered sale-or-return deals from Iveco don't suit NETV or its operators. Used heavy trucks are performing well, but the lateyear Euro-3 shortage has affected the company. "The introduction of Euro-4 and digital tachographs led to a lot of customers standing back and buying Euro-3 tractors," says Carrick.
"We have a good supply which has come to fruition. Demand will tail off, but in three years we'll have Euro-4 coming back — as far as used is concerned it's a nice stepping stone."
New sales this year. says McDonald, have been impossible to predict. "Hauliers have stood back and said just hold on a minute.They want everyone else to try first. [But] it's only a pause.
In truth, we aren't bothered whether we sell new or used as long as it has the right package — which brings us back to aftersales. If you're a full dealer selling new, then used and aftersales should have all the bases covered.The ones that will struggle are the ones that don't sell used — if the new product isn't acceptable, where do they go?" •