MARKET ANALYSIS
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As good as it gets
It’s good news for traders as used truck rates have started to stabilise after years of residual values boom and bust
Words: Steve Banner Stable used truck values nationwide spell good news for a market that has seen too many soaring peaks followed by catastrophic troughs in recent years
“Prices remain steady,” says Jonathan Bownes, sales executive at Volvo dealership Thomas Hardie’s Middlewich, Cheshire used truck centre.
“There’s little movement either up or down,” agrees Lee Smith, a director of West Thurrock, Essex-based independent dealership Hanbury Riverside.
However, many dealers say that a less-welcome constant is the shortage of clean, late-registered, low mileage stock. “Decent vehicles are hard to ワnd and, as a consequence, our stock level is around one-third of what it used to be,” Bownes observes.
The paucity of late-plate stock is a consequence of the new truck market’s collapse in 2009: if a truck has not been sold new, then it can’t be sold second-hand.
The impact of that collapse will gradually diminish, however, as the effects of better new sales in subsequent years take hold, says Bownes, which means that desirable stock should be more freely available from 2013 onwards.
Demand for second-hand trucks is uneven nationwide, with some dealers reporting that they are remarkably busy while others say that trading levels are adequate rather than outstanding.
“We’re absolutely ンat out at present,” says Stuart Wolstenholme, used sales manager at the Middleton,
Manchester branch of Scania dealership West Pennine Trucks. “We sold plenty of kit in January and it looks as though we’ll have a good February too.”
The perennial search for stock has prompted West Pennine to go out and purchase a ンeet of trucks Wolstenholme’s department is now busy retailing. “We’ve
acquired 20, a mixture of Volvos, Renaults and Mercedes as well as Scanias, mostly tractor units and dating from 1996 to 2011,” he says.
“They should keep us going for a while,” he adds. “In fact, we’ve already sold two of them.”
At Hanbury Riverside, demand is healthy, says Smith. “We’ve been busy since Christmas and we’re pleased with the amount of business we’re doing,” he says. “Things aren’t bad at all to be honest.”
Stock levels are buoyant, he says – “that’s the key to it all” – with the company increasingly concentrating on much sought-after 58-plate and later units. “Volvo FH13 480hp 6x2s tractors are in particular demand because they’re so good on fuel,” he says.
“We’re still getting a lot of inquiries for Euro-4/5 trucks that meet the new requirements of the London Low Emission Zone [LEZ] that came into force in January,” he continues.
“There are still operators out there who don’t really understand what it means and who seem to have assumed that the introduction of the new rules would be postponed because of the state of the economy.
“However, they are here to stay.” Other dealers say that business is steady, but no more than that. “We’re not breaking any records or setting the world on ワre although there’s certainly no reason to talk about gloom and doom,” says Bownes. “Hauliers are simply being a little bit cautious about spending money, although we’ve had one or two instances of operators having to buy because they’ve suddenly been given a job that will take them down to London regularly and need something that will comply with the LEZ.
“Where people are purchasing, it is usually a case of swapping an old truck for a newer one,” he adds. “They’re not acquiring additional vehicles.” "It’s a little quiet," says Andy Mackay, used truck sales specialist for the north-west of England at Daf dealership Chatワelds. “Some operators are hanging on to their cash while others are ワnding it difワcult to obtain credit.” “Our stock levels aren’t too bad at present but I suspect that the situation will get more difワcult as the year rolls on,” he continues.
“So far as buy-backs are concerned we haven’t got a vast number of vehicles being returned. Many ex-ンeet vehicles coming onto the market are older than they would’ve been in the past and have done more miles.” That is because operators have hung on to them for longer than they would have done previously because the state of the economy has made them wary of committing themselves to replacements.
When people are buying, it’s tractor units rather than rigids that are making the running, Bownes says.
“The days of a 50/50 sales split between the two have gone because using one artic is clearly more efワcient than using two 18-tonners,” he observes.
“That’s not to say that nobody wants 18-tonners these days – not all jobs justify the use of a 44-tonner – but they’ve become a bit like Trilby hats,” he adds.
“They’re still sold, but not in the quantities they sold in years ago.” ■
WELL-PRESERVED TRUCKS OPEN UP NEW MARKETS
Another way in which the market has changed is the degree to which trucks are looked after, making them more attractive as part-exchanges, many of which tend to go for export these days, says Bownes.
The export market is price-sensitive though, he adds. “As a consequence, you can have the nicest export-ready truck in the world, but if it costs more than a certain amount, then overseas buyers won’t want to know,” he explains.
So far as ワnance is concerned, most of the domestic customers Bownes sees either already have their funding in place or can get it without any trouble. “People who struggle to get ワnance don’t shop at my shop,” he observes.
Operators who need to search for funding do not have the choice they enjoyed prior to the last recession, he says. “I used to have the business cards of around 30 ワnance company reps ready to hand,” Bownes recalls. “Now I’ve got no more than half a dozen. The finance industry is a shadow of its former self and to be frank a lot of funders aren’t really interested in funding trucks these days,” he says. “They’d far rather leave it to the manufacturers’ own finance operations.”