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ell now and avoid the rush
Page 68
Page 69
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Operators have been given a stark warning by rental companies and manufacturers' franchised dealers: upgrade your trucKs now and cash in; wait, and you'll lose money. Kevin Swallow reports.
IFTRADE, moneylenders, rental companies and manufacturers get their way, 2008 ought to be a bumper year for truck registrations. In turn that will free up current rolling stock and prices should fall back into line.
The trade is desperate to kick-start the used industry. Outlets are paying too much to acquire remarketable stock and they are still taking a gloomy outlook, despite having received a helping hand with the recent drop in interest rates.The consequences of emissions and digital tachograph legislation are still being felt.
Yet finance houses and rental companies are upbeat. Fleet utilisation on short-term rentals. Christmas rush aside, is close to full, helped by 'switched-on' operators keen to replace ageing fleets.
Long lead times nansport managers are getting to grips with digitising their fleets but are finding manufacturers' lead times the initial stumbling block to replacing trucks. Subsequently they are turning to the rental and contract-hire markets.The middlemen have ordered well in advance, regardless of road transport's problems But talk to many operators and they'll argue that they aren't in the market for new products, preferring to wait for the price of new technology to fall and to find out the effects that further legislation.such as low-emission zones, will have on their operations.
It is in the interest of finance houses and rental companies to talk up a strong 2008, but where is the evidence?
Digital switchover One stumbling block, digital tachographs, is slowly being eroded. More than 400,000 digital drivers' cards have been issued by the DVLA and operators are in 0toa better position than ever make the switch. Major truck rental companies have helped the process by putting in orders for new trucks, providing digitach training and helping operators manage the gradual fleet replacement to digital.
Manufacturers' lead times are also a problem but dealers and rental companies have been proactive here. Operators have already targeted rental providers as an alternative source of new trucks, and contract-hire deals have been prioritised by several rental providers.
The threat of an imminent buyer's market will be on the minds of many operators conscious that residual values will fall as the year progresses. Operators that have held back replacement programmes since late 2005, ahead of the emission and digital deadlines in 2006, will now have ageing fleets.And it is possible their high-mileage trucks won't hold their inflated prices for too much longer.
A decent, low-mileage, lateyear truck will hold its price — but if too many high-mileage, late-year products start to appear, trade prices will fall on the less desirable.
Moneylenders, buoyed by the recent drop in interest rates, have money to loan, and rental providers have trucks to hire. Any financial reward for ageing fleets will be given to those who swap sooner rather than later.
Even though price hikes for Euro-4/5 and the SCR/EGR made fleet-replacement decisions difficult for many hauliers, the signs are that residual values should fall back into line with new vehicle prices. More money might be spent upfront but more money should be available when you come to sell.
Decreasing value So if you are a haulier and have put back that replacement schedule until things die down, YOU should consider the fact that your fleet will be decreasing in value by the day.
The longer you leave it, the less it will be worth. Lead times do vary; several dealerships have set themselves up by maintaining full stock orders in preparation for operators ready to upgrade.
Sell your late-year, Euro-3 analogues today and you'll raise decent revenue to fund the new vehicles. Wait and you might be stuck with them. •