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LEZ stirs up the market

27th March 2008, Page 52
27th March 2008
Page 52
Page 52, 27th March 2008 — LEZ stirs up the market
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Which of the following most accurately describes the problem?

London's LEZ has shaken up the bottom end of the market, with used dealers disagreeing over Euro-2 disposal, experts optimistic and rental firms offering quick-fire solutions.

Words: Kevin Swallow

CM reported last month (28 February, `LEZ makes waves across the used truck market') that operators holding on to non-LEZ compliant trucks would he left with devalued stock.

Steve Smith of independent dealership Smith Brothers Services said customers would now only buy a truck if it was `LEZ compliant'. He stressed: "A lot of overseas buyers will no longer take older vehicles. It's difficult to see what will happen to them now that there are no breakers yards about."

Phil Holmes, the used sales manager, eastern region, at the Scania dealership Keltruck was worried that some operators still didn't understand what LEZ was about. And Chris Hart, the managing director of Blackrod in Bolton said people had left it very late "to obtain the LEZ compliant trucks they need".

But there are some dealers making good on undesirable stock. Matt Hammond, used sales manager at Harris Daf, believes non-LEZ-compliant trucks aren't completely worthless. "After all, there's plenty of country left outside the LEZ zone.

"By definition, though, a vehicle that does not meet the requirements of the LEZ is likely to be getting on a bit," he adds. "So, unless it's something specialist such as a removal van, the owner should probably be thinking about changing it anyway."

Paul Hughes, at Paul Hughes Commercials, believes the LEZ offers a win-win situation since operators hurrying to buy LEZ-compliant trucks will free up older stock for overseas destinations.

George Alexander, chief commercial vehicle editor at EurotaxGlass's, agrees that LEZ won't kill demand for Euro-2 trucks. "Concern in the truck industry that Euro-2 chassis are to become close to unwanted is misplaced.

"While Euro-2 trucks are no longer welcome to enter London's LEZ — and other conurbations may soon follow London's lead — there are fundamental facts about these models which mean things aren't as bad as they seem.

Plummeting values

"Typically, a Euro-2 chassis will be aged between seven and 10 years old," Alexander continues. "This immediately puts limits on who will buy it, what type of work it will be used for and its price. At 7.5 tonnes, even a newer Euro-2 Box is worth little more than £5,000, and this figure drops quickly as age and wear and tear increase.

"With such a shortage of newer chassis to choose from, some of these older models have been kept in harness a little longer than usual. But, with or without the LEZ, their sell-by date is fast approaching. Over the past 18 months, many of these hard-used workhorses have been fetching poor prices at auction because they have very little life left in them," he says.

Those who might struggle are operators, such as the own-account delivery firms still running Euro-2s, who were heavily targeted by Transport for London in the run-up to LEZ's arrival, and are based inside London's LEZ. "A family-rim company making a daily 'fruit and veg' run into London markets using such a chassis will suffer. A punitive daily bill of £200 will quickly kill off any profit. The likely outcome for these users will be a move from a small truck to a big van," Alexander says. •


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