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Revving up used sales
Page 70
Page 71
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With a year under his belt Steph Cribbin, the director of Iveco's used vehicle business unit, is pleased with the way things have gone. Not that he is resting on his laurels. After turning the Used Plus programme from three regional used truck centres into a 26strong independent network, with satellite dealerships pushing the number closer to 90, he intends to see the job through to the end.
You have never had to travel too far to find a used Iveco product.-We sold a lot into trade. Back in 2000 we had 5,000 vehicles (returning through buy-back) in stock and we were moving volume," Cribbin says. How they are sold, and who is selling them, has changed over the past 12 months giving the company much more control."We've worked hard to sell product and not volume.There's a lot of money invested in these vehicles," he adds.
There is always a danger that when you praise the progress made in the past 12 months by Iveco and the Used Plus programme under Cribbin you imply that the previous incumbent and system were ineffectual.
With the Eurocargo so dominant and the Stralis not yet returning in strong numbers. Cribbin was aware when he arrived in the hot seat that the network needed overhauling.
The used truck centres closed by Cribbin served a purpose,but getting the Used Plus programme into a wider arena, and maximising the performance of the Iveco portfolio, required a more driven distribution network under one banner.
"My remit was to streamline the used business," Cribbin says, and he jokes that after five years as financial controller and telling the used business how to do it, it was now his responsibility to do as he preached.With residual values playing a vital role in underwriting new business, it was important for Iveco to get more vehicles under its Used Plus programme and encourage dealerships to invest.
"We divided the country into five areas, with used vehicle district managers for each district to look after the dealers.They aren't involved with selling — they just add support to the dealers," Cribbin explains.
Growing confidence
With dealers getting first choice of the returning buy-back and operating-lease vehicles, those putting in dedicated used sales teams and a strong support system to give operators confidence developed the network.
The proof is in the pudding. According to CAP, the Daily's residual values rose when those of most of its competitors fell.The Eurocargo is within E50 of the Mercedes-Benz Atego and the Stralis is performing strongly.
Compared with the same period last year, the first quarter of 2006 has seen sales rise by 27% — and the number of vehicles from the portfolio sold through the Used Plus network has increased by 47%. Last year Iveco handled 2,810 used vehicles; the projection for 2006, with 20% cancellation for extended deals taken into account, is somewhere between 2,500 and 3,000 vehicles.
In wider issues, the Used Plus network will handle few Dailys (because of how they are purchased), a fifth of the new Eurocargo medium-weight chassis cabs sold and a third of the heavies sold.The last means Stralis.
"People have recognised that the Stralis is a very good vehicle," says Cribbin."The industry has created a new marketplace — the three year-old tractor — and operators are looking at the cost in terms of pounds per week.
"We treat it as a new product. Used sales people have to be better than new sales teams as they have only the product as it is to sell, not the list of extras you can add."
If anything, dealers have been complaining that there isn't enough Stralis product to satisfy demand. But straying away from the portfolio of returning vehicles and buying from the open market isn't a policy Cribbin intends to indulge — and purchases that do come from outside need to have ready made customers in place.
"We have a supply of quality vehicles. We were the first to create a 'return conditions' programme, which was picked up by the British Vehicle Rental and Leasing Association. Dealers are investing lots of money into new sites and need consistency.
[Ivecol and the Used Plus dealers meet every quarter. It isn't run by us but by the dealers, and it's a chance to iron out any problems," he says.
If short supply of the Stralis is the dealers' main concern, it sounds as though Cribbin's strategy has gone to plan. •