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Investing in the future
Page 72
Page 73
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Mercedes-Benz North-East franchise Bell Truck Sales has expanded its dealer network across the North-East with a new site. Kevin Swallow
visited the latest addition on Teesside.
Mercedes-Benz opened its doors in the UK in 1974, naming Bell Truck Sales as its North-East franchise.Today, you can see the latest addition to the Bell Tnick Sales group on the North Tees Industrial Estate, Stockton, a stone's throw from the River Tees.
The North Tees trading estate,like the company's presence on Teesside, is new,and the site, a mix of hard standing and asphalt with pagodas over selected vehicles and several cabins located in the middle, stands in marked contrast to the warehouses around it.
Building a market
Initially more than Ll .3m was earmarked for construction but, says managing director Trevor Simmons, once the figures for an allsinging, all-dancing dealership were reassessed it didn't offer a suitable return on investment.
Instead,the company chose a more low-key approach to a site that has the potential for growth."When we looked at the costings we didn't feel it would give us the necessary return with a purpose-built showroom, offices and workshop," says Simmons. "Our view was to start with a lower-cost operation — this facility cost £600,000 to build, and the company can progress on it. We will start with used, build up the market locally, and hopefully end up with a more permanent facility based on a market we have created ourselves."
Simmons sees a more universal operation on the site in future. "We would like to see it as a multi-function site. Within the group we have car franchises as well; I wouldn't be surprised to see if we have some other aspects in the business-to-business side of things like 4x4 and car-derived vans," he says, hinting that negotiations for such enterprises are ongoing.
Used sales manager Brian Bird expects the site to house 30 vans and 20 trucks,as well as selling 280 trade stock vehicles a year. These are important targets, but the North-East isn't immune to the effects of Euro-4 emission levels and digital tachograph deadlines. Sales director Daryl Harris says:"A lot of customers brought a lot of [new] sales forward ahead of Euro-4. We taxed 93 trucks in September when we normally tax 20 or 30, ahead of the deadline. We also taxed 40 or 50 trucks pre-digital in May 2006.Things have settled down now."
Operators turning to used want 12-month-old trucks with analogue, says Bird, a demand that is nearly impossible to meet."A lot of people don't want to go older than three years for a truck, they want a year old.As soon as digital tachos started to hit people, we started to look for alternatives and sourcing became more difficult."
This demand saw the price of a typical three-year-old 2544 long-distance Actros rise £1,100 in the CAP book The pricing specialists upped residuals for all marques across the board for three-year-old stock in May and June, reflecting the higher demand.
"We will have this demand-supply situation for the next 12 months before Euro-4 starts to enter the used market," says Bird.
But despite all the extra work, volumes for the dealership are still being reached, says Simmons."You might have to sell someone a slightly older vehicle than they wanted to buy: maybe they would like to buy something new hut instead they would try to source a nearly new product.
"There is no deterioration of the volume of vehicles still out there. March [2007] was our best ever month on used vehicles. Supply is difficult, but it is possible."
In-house rental An in-house rental company — North Star— started 15 months ago and has 80 commercial vehicles of all sizes and marques, mainly on long-term deals, to help provide used vehicles through Stockton's new site, Key to the company, says Simmons, is the afterrnarket."Taking into account the aftersales work, we earn more money selling used vehicles than selling new, Part of our philosophy has been to have the best aftermarket service in the North-East and we won the best Mercedes-Benz franchise aftersales dealership award (CM5 April 2007).
"In the last three years we have transformed the way we deal with aftersales, Service call-out times are just over 40 minutes from receiving the call to getting to roadside, that's lower than the hour national average. We were at one hour 40 minutes three years ago." Credit goes to aftermarket director Graham Burke.
More customers, says Bird, want to retain the vehicle and extend their repair and maintenance con tract. "Around 50% will extend the R&M deal," he says.
The past 18 months have seen a lot of activity for Bell Truck Sales and Simmons is looking for a period of consolidation before further growth. But with several irons already in the firer further expansion could be sooner rather than later. u