1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144 
A Leaner operation
Page 52
Page 53
If you've noticed an error in this article please click here to report it so we can fix it.
Northside Truck & Van is on course to emerge from the recession smarter, with a strategy in place to build local business and market its stock more astutely.
Words and Images: Kevin Swallow In the 15 months it took for the new and used vehicle sales market to collapse as the recession took hold, Tim Ward, managing director of Mercedes-Benz Northside Truck & Van, has been busy ensuring the dealership can make good when the recovery comes.
There are signs, he says, that van sales are picking up, and that there is some buoyancy in the market.
He adds: "We do the national van fleet sales, and we are very good at it. Part of my strategy is asking: how do 1 increase focus on the local business that will use my aftersales facilities?' [The recession] has reinforced the need for more local business.
"The downturn has forced us to change our marketing, work on the website, and use digital marketing and text campaigns. We sent a text out saying swappage (Mercedes-Benz's version of scrappage, which has created more than 100 sales for Northside) had two weeks to go, and three people came in to trade their vehicles.
"We are working more with our data to try to understand our buyers; to analyse who uses our workshops and who we get the most downstream revenue from, and then focus our sales teams to go and speak to those people," he continues.
On paper, the past year has been brutal. Northside was forced to slash its workforce from 307 in November 2008 to 240. Ward says the firm will break even this year after registering £1.4m net profit in 2008, the £12m parts portfolio is down 7%, and the £2m standing used stock in mid-2008 cut to /400,000.
Falling values
Ward says the recession has come in waves. "First, it was used vehicles. I could see residual values dropping. We took a decision to get out as quickly as possible," he says.
Values fell 5% each month. "You couldn't afford to keep stock because it kept losing too much money.
"The vans bottomed out in January/February and have started to come back. Trucks have bottomed out in the past month," he adds.
Operators then started to cancel orders. After record sales in the first six months of 2008, more than 100 cancellations followed. "There was such demand [in May 200;] with 12-month waiting lists, hauliers were ordering a ye r in advance. The market collapsed in July 2008, then we aw in August/September/October swathes of can ellations on trucks that hit us quite hard," he says.
rthside decided not to invoke cancellation policies, but iid change the ordering process. "We are far stricter no Everybody knows the world has changed," he says. -A haulier three years ago would have laughed at a 10% deposit, now people understand why."
La k of new sales A It ck of new sales affected aftersales, -Hauliers are do 12% on mileage, which means 12% less servicing and parts," Ward says. "You don't wear your brake pads down when the vehicles are stood still."
Payments became an issue, too. Regular credit checks are onducted, and most customers honour their co mitments. But smaller construction companies and garages, where Northside supplies genuine M-B parts, have been the ones in trouble. Some have even gone under, owing Northside money.
S all hauliers and owner-drivers rely on servicing and bre kdown cover, and call Northside if payment becomes an i sue, he says.
A tight ship means Northside has avoided going cap in hand to the bank. Ward says it has a strong asset base and a very good relationship with the bank. "Everyone found the Liownturn the same. You never seem to be quick enough to reduce your expenses in line with how the revenue is dropping. Now, from a profitability point of view, we go into 2010 with our expenses in line with where revenues should be, and, hopefully, we can improve revenues," he adds.
That rests with market recovery. Hauliers absent from the market in 2009 cannot stay out of the market in 2010, but he warns the recovery will be gradual, with the Euro exchange rate applying pressure on manufacturers to raise new prices next year.
"Trucks arc set to come back next year, with, say,10% improvement, vans will come back a little bit quicker," he says, before turning from the market back to Northside.
After downsizing, Northside is a leaner, smarter firm coming out of the recession, he says. "We have got some excellent areas; Leeds by the M621, Sheffield by the MI, Bradford, which does a lot of retail, and Doncaster, where we see the M18 corridor as a growth area for RDCs.
"The land in Sheffield and Normanton, in Leeds, is full. The price of land is always going up," he concludes "Doncaster is a favourable site where logistics will start to grow, but that has been put back with what's happened. It will happen, though." •