"Discounts are only worthwhile when they're rare"
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Truck manufacturers will tell you discounting is a bad thing, but they can't tell you how they intend to stop it. The recent cooling of the new truck market has done little to dampen down those discount fires.
Such "competitive pricing" (to use the manufacturer's euphemism) is good for cash-starved operators. It might even have a marginal benefit for a franchised dealer desperate to help its turnover. But For usedtruck dealers it's definitely bad news. While it would be stretching things to put all the blame for the current woes in the new truck market on heavy discounting, it's a symptom of a sickness that needs curing. Using big discounts as a sales aid was always a dubious short-term game. It's time for discounting to be replaced with a sustainable policy for new truck prices that can cover differing customer needs without signalling distress marketing. Even the most naive heavy truck buyer must have tumbled that discounts are only worthwhile when they're rare; when everybody waves goodbye to the price list they becomes meaningless. There's little point in publishing a price list that quotes inflated monopoly-money prices simply to allow the dealer to finish up with a half-decent sale after a heavy discount has been dialled in. Perhaps the only good thing that can be said For discounting as a sales aid is that it can give a salesman attempting to sell an inferior model a chance to muddy the waters and prevent a true comparison with the competition!
However, there are signs that some manufacturers are at last bringing an air of realism into their price lists. After previously offering some prey "competitive" deals on FHs against a published list price, Volvo has revised its official pricing structure to reflect what's happening in the marketplace (CM 713 September). It will be interesting to see how this move is received by truck buyers.
The news can't come too soon for independent used dealers. Right now their yards are stocked with good-quality, late-model used trucks which aren't selling: attractively priced, warranty-backed new trucks, offered on ludicrously low rental or leasing deals are doing nothing to help them change that situation. New truck dealers aren't the only ones to have seen a decline in the market after a good First quarter. But the independent dealers can't turn to the Factory for support when times get tough. Some can export stock but they're the exception.
And nobody is going to buy for stock when they've got too many vehicles in the yard already. According to one used dealer: "If you ring a competitor up and offer him a good deal on a truck they're just as likely to think you're trying to do them."
In the meantime cashf low, the life-blood of the independents, is slowly coagulating in yards around the country because lowpriced new trucks aren't the only problem used dealers are facing. There's the small matter of a lack of business confidence within the transport industry, and that's not likely to change in the short-term. With little interest being generated in lightweights during the past month, values have fallen again, by an average of 2500. Beset by too much stock and too Fewbuyers, this sector is struggling the hardest. In the rigid market, 17-tonners continue to weather the storm better than the rest although all four-wheelers are proving slow to move. Where once you couldn't get a good late model multi-wheeler For love nor money land big money too) the slump in tippers shows no sign of ending so values are likely to slide even further throughout the rest of the year. With Few exceptions the attendance at most of the recent major truck auction centres has been sparse. The number of buyers at some of the best known light commercial auctions has been even lower. Most pundits were taken aback to hear that the giant auction group ADT was itself on the market— few of its customers seem aware or even interested that the ultimate ownership of their favourite auction is liable to change. Meanwhile it's business as usual...