MAN selects for growth
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MAN has joined the ranks of manufacturers offering approved used trucks. The MAN Select scheme is an important part of the company's plan to gain 10% of the new truck market by 2000.
by Toby Clark • MAN has appointed 13 of its 28 Truck Centres as Approved Used dealers, offering vehicles of less than four years old and limited mileage. The trucks will serviced and inspected with a minimum warranty of three months, and optional further cover and finance deals.
The firm's Swindon base also houses its Vehicle Management Centre. This operation co-ordinates the Select scheme and acts as a clearing house for used trucks, whether buy-backs, part-exchanges or bought in. Its primary purpose is to supply Select dealers, but the centre will also sell trucks directly and offer hire vehicles.
Strategy
MAN's long-term goal is an increase in its UK market share—from 6.4% last year to 10% by the turn of the century—and to do this it needs to ensure residual values are good. "There is absolutely no reason why our guidebook values should be second to Scania's" says David Drake, manager of the Vehicle Management Centre.
But the Select scheme could also help MAN's dealers, at a time when new vehicle sales are barely profitable. Drake says "We're not reinventing the wheel—we already have successful dealers in the used market". Some MAN dealers already sell as many used trucks as new. But Drake admits that there's room for improvement: "Independent traders have got far too much of the market that should by rights belong to manufacturers—and they've done it by being bloody good".
Dealers
Drake identifies the used tuck market as highly volatile, with dramatic cyclical swings—it requires considerable initial investment, and there's the potential for heavy lo.s.s-making. But with the Vehicle Management Centre co-ordinating fleet buybacks, identifying used vehicles across the country and setting up finance and warranty packages, the situation should be more stable. There are also advantages in terms of information technology— including an Internet site with, ultimately, a used vehicle list.
Why are fewer than half of MAN's Truck centres involved in the Select scheme? "We do not want two tiers of dealerships," says MAN's UK managing director Dr Jurgen Knorpp. "I will not force a dealer into this high-risk investment if they are not prepared".
The initial cost of becoming a Select dealer is likely to be at least £100,000. But the return could be substantial: David Drake predicts eventual sales of more than 1,000 trucks annually at the Swindon VMC, and over 2,000 from Select dealers.
Buybacks
The Vehicle Management Centre will be responsible for fleet buybacks, even of non MAN trucks: the evidence is already there in the line of Daf tractors for sale outside the Swindon premises. But Jurgen Knorpp is adamant that this is not a case of building market share at any price: "In the past manufacturers have put unrealistic buyback values on trucks".
Another side of the VMC's operations is rental: "We're not competing with our own customers!" says David Drake. The rental scheme will not be publicised overtly, and will mainly be available for cover when a vehicle is traded in, or as a stand-in during the build period for a new truck.