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Sales misery drags on

3rd October 1991, Page 16
3rd October 1991
Page 16
Page 16, 3rd October 1991 — Sales misery drags on
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Which of the following most accurately describes the problem?

• The slump in truck sales is bottoming out, but the market will not begin to recover until at least the second quarter of 1992, says the Retail Motor Industry Federation. The RMIF represents 1,000 CV dealers; Mike Mudie chairs its national truck committee. He expects the recovery to be "very slow". So far this year truck sales are running 38% down on 1990 and 56% down on 1989.

Mudie, who runs a MercedesBenz distributorship in Gloucestershire, predicts "further rationalisation among truck manufacturers and dealers, and more casualties, mergers and takeovers".

Some of the smaller truck manufacturers might not be in business in a year's time, he warns, because they lack sufficient funds for investment when the slump ends.

The RMIF condemns the Budget increase in diesel duty. It wants the duty slashed to give the haulage industry a boost.

The main problem facing the economy is now seen as lack of confidence rather than high interest rates. "With interest rates coming down now is the best time to buy a truck," says RMIF economic advisor Neil Marshall, particularly as the UK has the lowest new truck prices in Europe. French hauliers have to pay 10% more; and German hauliers 30% more.

Mudie urges dealers to concentrate on providing good service and parts backup — many have ignored the advance of specialist contract hire firms which persuade operators to take out maintenance packages with them, he believes. This had denied dealers a major source of profit and left them to depend solely on tight sales margins. But as trucks become more electronically sophisticated it makes less sense for most hauliers to An their own commercial vehicle workshops, he adds.

Mudie reckons that his firm is typical of small distributorships in semi-rural areas — it has lost money this year and will only break even because of a pay freeze: he and his partner have taken a cut in salary. "Unless there is a turn soon I can see there being an end to the road," he admits.