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Turning trucks into wine

3rd February 2011
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Page 42, 3rd February 2011 — Turning trucks into wine
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Which of the following most accurately describes the problem?

What’s the difference between a yard full of trucks and a case of ine wine? “Trucks do not improve with age,” observes Nigel Strevens, joint MD of Leicester-based DAF dealership Ford & Slater.

That was certainly the thought that struck him and fellow joint MD and brother Tim Strevens at the start of the recession.

An avalanche of cancellations left them with 225 unsold new vehicles to dispose of through 10, mainly freehold, dealerships spread across the Midlands – primarily the East Midlands – and East Anglia.

Using it to their advantage

“One thing that worked to our advantage was that the way in which the exchange rate had moved made trucks that had to be ordered from the factory more expensive than those we had already got in stock,” says Tim.

“So we were able to offer customers seeking to order vehicles an alternative that, while it might not be exactly what they were looking for, was nevertheless available at commercially competitive terms.

“As a consequence, we managed to get out of them at break-even and in some cases with a small proit.” If an unsold truck had been built to an unusual speciication, then they went back to the operator that had originally ordered it to see if a deal could be structured to make it more affordable.

“That could involve, say, a lexible inance package or deferring the purchase for a number of months,” Nigel says.

In cases where chassis alterations might make an unsold truck more appealing to a buyer, then the work would be carried out by Ford & Slater’s Leicester bodyshop. With other work slowing down, it had the capacity.

“It should also be stressed that Paccar Financial and DAF supported us by extending our stocking terms and allowing us to take time to ind the right customers for our unsold vehicles,” Tim says.

“Without that assistance, we’d have been facing a lot more of a challenge.” At the same time the company reduced annual capital expenditure by more than 50%, from £1.1m to £400,000, and cut its headcount by 33, mainly by not replacing people who had left or retired.

Keep a close eye on your stock

Ford & Slater was an LDV dealership too. Sensing the manufacturer was in inancial dificulties sometime before its demise, it kept its stocks of new Maxus vans under tight control. Ford & Slater sold LDV through ive locations, although it was only active at two towards the end.

Tim says: “We end up with quite a few used LDVs though because we took over 100 of them from the factory in settlement of outstanding warranty payments and sales bonuses.” ■

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Locations: Leicester

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