BAD TIMES
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Dealerships have been closing down at the rate of 20 a month in the past year. Some have gone forever, and some have turned into service outlets only. What went wrong?
• These are lean years for truck dealers unfortunate enough to be in the wrong place at the wrong time. Since 1 July last year, well over 235 dealers have lost their truck franchises through either the merger of Iveco Ford on that date, or through the closure of Bedford two months later. Truck dealers are losing their livelihood at the rate of 20 a month.
The squeeze goes on: Leyland and Daf have now combined forces and another dealer shake-out is in the pipeline. Rumours abound that the bloodletting is not over. Truck manufacturing in Europe is still suffering from over-capacity and one more major producer has got to go_ Dealers do not rest on their laurels anymore. They cannot afford to. Neville EMV used to be a big-time Bedford dealer, based at Mansfield in Nottinghamshire. Its story embodies the chaotic state of an industry in flux. "We were always in Bedford's top half-dozen dealerships in terms of sales," says Brian Eastwood, Neville's director of commercial vehicle sales. "I used to sell more Bedfords to the National Freight Consortium than anyone else in the UK, and the NCB. Today we just scratch about. I cannot even get another franchise, and we would very much welcome another agency."
Neville tried hard to get a different franchise lined up for the future.
According to Eastwood, "I contacted MAN-VW but they did not even bother to come down and see us. I contacted Leyland and the day they were down here they were called back to the factory for an important meeting. It was the day that they were told the company had merged with Daf. I haven't heard anymore since, obviously. We also tried Renault, without success."
Eastwood is bitter about the way Bedford pulled out of the market, and he reckons that he could still be selling Bedford TLs today. "I bought 90 trucks off Bedford after the closure announcement in one go. I thought that that would keep us busy until the middle of 1987 at least. They were all sold by the beginning of the year."
To make ends meet, Neville is concentrating on buying and selling used trucks and on selling Bedford's van range. Things are not that rosy here either. "The supply of used vehicles seems to be drying up," says Eastwood, "so we won't get rich in that department. Getting hold of Rascal vans is ridiculous, they are still on allocation. We cannot get enough. We are allowed one Rascal a month at the moment. That won't get us rich either. The Midi has not been a success for us, the CF has gone and all we are left with is the Astra van. They're good, but they're more expensive than the Ford van and most of the fleet buyers go on price, nothing else."
Neville has lost two jobs since the closure announcement and it can only hope that the Bedford workers accept the Isuzu deal for the future prosperity of the group. Otherwise, says Eastwood, Bedford is a spent force.
Nobby Clark of Cowley and Wilson in Milton Keynes is another ex-Bedford Trucks dealer who decided to buy a job lot of trucks to tide him over. Cowley and Wilson was not a volume sales franchise like Neville, and Clark took on 78 end-ofthe-line vehicles. He has got 36 left to sell. "They're mainly non-HGV 7.5tonners," he says. "It will keep us ticking over for a while." Like a lot of former Bedford dealers, Wilson and Cowley has signed a five year parts and service agreement with Bedford.
"Parts availability is still good out of Bedford," says Clark, "and it is quite surprising how fast we have been able to get hold of some bigger spare parts recently." He was surprised that General Motors eventually pulled the plug. "You could see the signs developing as early as 1984," says Clark, "but we all thought that someone, somewhere would throw Bedford a lifeline." Wilson and Cowley now claims to be number six in the Bedford national van sales league, and Clark is worried that this business could be in jeopardy over the Isuzu dispute. Like Eastwood at Neville, Clark thinks that Isuzu could be Bedford's last chance.
Derek Clark, commercial vehicle sales manager at Murkett Brothers in Cambridge, also hopes that the Isuzu deal goes through. It could mean that the smaller range of Isuzu trucks will come into the UK in a few years time: "Isuzu does a very nice 7.5-tonner," he says, "which I'm sure we could sell, marketed and badged as a Bedford." Murkett has taken on a parts and service agreement with Bedford too, and that is doing well, though the firm's Cambridge depot has reduced its overall stock holding levels rather than increased them.
Murkett knew that something was coming when Bedford began withholding its dealership renewal contracts. "We all heard it first on the radio," says Clark. His company is now "struggling on" and the firm's Huntingdon depot, another former Bedford trucks outlet, is considering moving to a smaller site. Murkett has also found that the Midi has not been a successful replacement for the CF mid-range van as yet, and that sales in that area are down.
Charles Warner, a Bedford Trucks main dealer in Lincoln, has it hopes, moved on to better times. General manager Ron Evans has now tied the dealership up with Seddon Atkinson, a marque with which he used to work. "We were doing well here for Bedford," says Evans, "and we were sad to see them go. We had a one hectare site and one of the country's most modern Bedford franchises. I did not want to let that slip."
Evans looked around, had a few offers and plumped for Seddon Atkinson. He still respects the Bedford range and thinks that it was a strong product. "Bedford always gave me some headaches when I was selling against it," he says, and he says part of the decline was selfdefeatism. "There was a crisis of confidence, no leadership from the top and salesmen were going out with the attitude that they had already lost the sale."
Scotts Commercial Vehicles of Penrith, a former Iveco dealership, has also defected to Seddon Atkinson, but not before managing director Colin Richards had taken Iveco to court on an injunction. He is still angry about the way he was treated. "We were told we would be one of the new IFT heavy truck dealers. Then, one month later, we were told we would not be and that the contract would go to a dealer in Carlisle. It wasn't on. We were then given 12 months notice and told at the end of that period we would be given 'some' compensation, based on
profit levels and so on. It was ridiculous, how could they expect us to run for a year when there was already another new IFT dealer 27km up the road complete with the new signage and everything. After six or seven months we would have been wiped out."
Richards fought Iveco in court and won, "enough to pay off the mortgage on the premises". The workforce was cut from 30 to 12, and the company fought back by buying and selling and hiring and leasing wherever possible. Today's profit margins are much better sayslichards. "We made nothing on the Ivecos. We had to buy market share and the manufacturer supported us. All that they wanted to do was shift metal. Seddon sticks to its price much better, and I think customers respect us more for it."
Former Ford dealer Douglas Seaton of Yeovil also took the IFT merger badly. Survival seemed unlikely, but this month it has just taken on a Scania parts and service agreement and is getting stronger in the contract hire market all the time.
Only two jobs were lost, though the company had anticipated more, says sales manager John Gorman. Like all of the other dealers we spoke to, Gorman is now diversifying. He will not be caught out again.
If an epitaph were needed to the events of the past year, and a warning for the future, it must surely come from Scotts Commercials of Stockton-on-Tees, a former Iveco dealership. When we
contacted the company a year ago to discuss the newly announced merger and a possible "rationalisation" of the dealer network, a spokesman for the firm said "no way. We're not going to sit back and let it happen. No-one will be forced out" Today, Scotts Commercials of Stockton is an unobtainable number. The company does not exist anymore.
0 by Geoff Hadwick