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Battling for business

30th May 1996, Page 42
30th May 1996
Page 42
Page 42, 30th May 1996 — Battling for business
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Which of the following most accurately describes the problem?

If you think the South-East is a recessionproof zone try setting up a second-hand truck business. Right now used sales are quiet—very quiet.

For Tony Robinson, used vehicle specialist at Renault Trucks Essex (RTE), there is only one consolation: "It's everywhere. Everyone I speak to says they've never known anything like it." Sitting within the shadow of the Queen Elizabeth 11 Bridge at Dartford the wholly owned Renault dealership's West Thun-ock site is in the middle of one of the busiest transport areas in the South East. Within a 10-mile radius there are dealers representing just about every major manufacturer on the market.

Despite some signs of recovery Robinson warns that a rash of cheap contract-hire and leasing deals on new chassis has hit sales of late-model used trucks: "There's no rush to go out and buy stock," he says. "The thing is not to panic: when that happens people slash prices and it does no good. The guides get hold of it and you're back to square one."


RTE is on course to sell 60-80 used vehicles this year. "The Magnum has a good following here," says Robinson, "especially among the international boys," However, he faces tough competition: "This is Scania land," he says, "but they're not as strong as they were. It's just a case of getting operators into a Magnum. I've got secondhand Magnums that will pull in Scania s and Volvos, but you don't get many Scanias and Volvos that, will pull in a Magnum!"

Down the road in Pu rfleet, Scantruck's used vehicle sales manager Keith Hughes is equally unimpressed by the market: "New sales have absolutely killed us. The price between new and used is getting closer and closer and warranty packages on new are so good too." Tongue firmly in cheek he is scathing about the easy availability of leasing deals: "Anyone could come in here and have three new trucks! But on used we're looking for 20 plus

Robinson's wry comment about "Scania land" is borne out by Scantruck's sales figures: at 250 units a year including 7040 tractors it's head and shoulders above the local opposition. "We've still got the status and the truck that people want—new or used," says Hughes.

A recent flurry of used truck sales has helped bolster Scantruck's dominant position, but Hughes sees the business going through a major upheaval. "Our traditional base of small hauliers are either getting out, he explains, or the business is going to their sons who don't see any advantage in owning the asset. Where people used to buy for residual they've having their nestegg now and going for contract hire."

Ile reports little demand for anything older than a D-plate: "There's nowhere to put them, and no market for them."

Faced with the prospect of having to help Scania Great Britain dispose of large numbers of fleet tractors in the future, following its recent push for a greater share of the UK market. Hughes remains philosophical: "Well worry about it then."

Many dealers are looking nervously at stock levels, but on the far side of the Thames estuary in Kent one of the largest in the South East, independent dealer AR Pugh Commercials, sees no reason to panic. Sales manager Frank Scott insists: "Cutting back on stock is a false economy. The only way forward is to keep buying." Company director Alan Pugh Jr agrees: "If we buy 30 trucks then we'll sell 30 trucks We tried easing up and things stopped."

AR Pughs strategy of turning over a large stock for modest profits has clearly paid off and the Addingtonbased dealer has no qualms about buying heavy stock, especially multi-wheelers, to give its customers a wider variety on the forecourt. "The tipping market doesn't frighten us," says Scott.

The company is also happy to buy specialist equipment like plant trailers, or the Leyland Landtrain wrecker that was formally run by the now defunct MAN dealer Thameside. Pugh's workshops are kept busy tailoring vehicles to customers' requirements. Whether it's mounting a curta insider body on a previously box bodied chassis, or fitting a new tipping body to an 8x4, Scott is clear that "the days of 'That's the motor over there, take it or leave it' are long gone. You've got to be prepared to change things to keep the customer happy" As the manufacturers attempt to exercise a greater influence on residuals, Scott remains sceptical about their expertise in offering long-term buybacks: "If you could predict the future you could predict who was going to win the lottery!"

L' by Brian Weatherlev

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