Watch those foreign deals
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The used vehicle market is depressed, warns Steve Gray, ()Inc operators may be too if they have an unpopular import to se
E SECOND-HAND market for lmercial vehicles is possibly re depressed today than it ever been.
-ugh interest rates, brought by massive increases in the limum lending rate have, ibined with the prolonged )1 strike, knocked the bottom of what is normally a buoybusiness.
Distributors of new vehicles staying away from taking in t exchanges. They argue that )cond-hand lorry actually deciates just by standing ?seas new vehicles in stock and do increase in value. For m the cost of keeping new licles in the park is high tugh anyway, as they have to interest on the capital ployed.
Many distributors will only e in a part exchange if they re already got someone to r it. To find out just how bad ;iness is, and to see if there any rays of hope on the izon, I spoke to Charnwood Truck Centre at Shardlow in cestershire and Peterbogh Engineering.
Charnwood MI Truck Centre )rates two distributorships:— age, under the Charnwood dge banner, and Fodens, Jer Charnwood Engineering. ) companies both form part of Giltspur group, Charnwood's managing .,ctor John Shackleford told just how depressed the :0nd-hand market is at the rnent. He feels that the high 5rest rate prevailing is the prime culprit with the steel strik coming a close second. In th Leicester area alone on second-hand dealer has laid 15 people because of the pa lous state of affairs, he said, John Shackleford believE that the market though he probably reached the lowest eb it can and that things wi improve during the summer. / present many fleet operators a r hanging on to vehicles longe if they are in a reasonable cot dition, as replacement costs at astronomical. A new tractiv unit which a few years ago co: £1 0,000 now tops £20,000.
If there's life left in a vehich it pays to keep it running uni the financial climate improve! The effect is to bring poor( vehicles onto the second-han market — they've usually been run into the ground by the time replacement is then contemplated.
Some operators, particularly in the Leicester area, John told me, dabbled with certain imported vehicles and burned their fingers. The vehicles, which seemed attractively priced at the time, were in fact unreliable and very difficult to .get spare parts for.
An imported tractive unit which sold for £17,000 a year or so ago wouldn't fetch £3000 now, he told me.
Unfortunately for these operators, they tend to get locked into buying another new foreigner, as it's only with these dealers that they get any sort of realistic money for their old trucks. Many would prefer to buy British but are unable to because of the poor trade-in prices offered.
Among those vehicle which do sell well are any with a Gardner engine. The legendary reliability and economy of this famous maker's products, it seems, commands high respect among second-hand buyers.
Charnwood Engineering, having been a Foden distributor since 1967 when distributor
ships were formed, is naturally pro-Foden. If a customer comes to look for a second-hand vehicle, obviously the Charnwood salesman will try to sell him a Foden.
Any resistance to the grp cab has disappeared, says John Shackleford. People have, he says, realised the benefits of a corrosion free cab which is reasonably easy to repair. Early problems with the Foden gearbox have been eliminated too, as every one has been modified.
Now, with the latest S10 cab, John feels that driver acceptance will be even greater. Howevet, of course, few of these will be on the second-hand market for a while.
Choosing the right engine for the job is important too, and, as I've said, Gardner reigns supreme — particularly for tip pers. However, tractive un require a bit more -goanc Rolls-Royce 265L or 240 Cu mins seem the best bets.
Larger engines such as t Cummins E290 or Rolls 29 are not, of course, coming or the market yet. Indeed, Jo told me, late model vehicles z usually quite difficult to sell owner-drivers.
The deposit for a new vehir on finance is a quarter of t total. However, for some us vehicles — depending on age the deposit can be up to o half. Obviously then, an own, driver looking for a fairly IE model is usually swayed in buying new.
Some dealers will inflate ti price of a used vehicle to buil in the extra deposit. In tl main, though, late cle vehicles are bought by smi et owners who are "'testing water'' before • committing rnselves. They may have got :ontract which is a little unlain and, rather than invest in arancl-new vehicle to do the ), they will go for secondnd.
One important feature which arnwood will offer to secondnd buyers is a certain amount driver training. This, of Jr-se, is also available to new yers. After all, John points t, no operator in a factory iuld be allowed to use a
• 0,000 machine without inuctions, so why should a ver not be given training on a
In these difficult times, rather in take a used vehicle in on ac, Charnwood's five-strong es force will try to sell it bee the deal is completed. Often iy will introduce the customer -eel to a likely purchaser her than take the vehicle in d resell it. More often than t, though, a truck can be sold .ough the trade to one of the ;ond-hand-only dealers.
Surprisingly, many used den vehicles are exported to Ing Kong instead of being d within the UK.
if a part exchange is critical to Jeal, however, Charnwoocl I take it in, but only after a )rough inspection to MoT indard has been made of the hide in the workshops. All ms relating to its safety and general condition are checked and the take-in price adjusted to allow for any repairs necessary.
When the deal has been done these repairs are then carried Out and the vehicle put up for resale. 'A vehicle in this condition will be an excellent proposition for the used buyer, but will obviously fetch a price commensurate with its condition.
Peterborough Engineering's George Hays was equally dismal about the used vehicle market. Like John Shackleford he blames the interest rates but is more affected by the steel strike. One of their associate companies is Lynn Commercials and much of the imported steel comes through King's Lynn docks.
Operators unable to find work for existing vehicles are obviously not going to expand their fleets. Indeed, m vehicles are being laid George also points out that time of year is usually quiet. h previous bad winters hay slowed down agriculture main of his customers haul sugar bia and vegetables — although th isn't the case this year.
Most people, George 11 lieves, have been waiting for th Budget to see if interest rale will allow vehicle purchases.
From my conversations it John and George the situatlo appears grim. However, th .commercial vehicle business tough and resilient one and will take more than a bad pa to affect it permanently. signs are that vehicle sales pick up — in spite of the dicted recession — although boom years are probably gon