A dynamic industry

The RMI National Franchised Dealers Association takes a look at the challenges ahead for the truck sector

The British truck dealer network is one of the backbones of commerce in the UK. To define the sector only by its sales activities downplays the variety and importance of the work it undertakes to put the UK’s distribution and logistics fleet on the road, and keep it there, performing to the best of its ability.
    
Each of the UK’s truck dealers provides a comprehensive range of services for its customers. This goes from advising the customer on the specifications of the truck they want in the first place, converting them when necessary, servicing and repairing, to providing all the relevant testing facilities.
    
This is a dynamic hands-on industry led by businesses where heavy investment in facilities is a must. Broadly speaking, most dealers are divided into one of two groups. The first group specialise in light commercial vehicles, such as vans, small trucks and mini buses, weighing up to 3.5 tonnes. The second group focus on heavy commercial vehicles that require an Operator Licence and Heavy Goods Vehicle (HGV) License. These include rigid trucks, multi-axle trucks, and articulated lorries and trailers. Some dealers cover both areas.
    
Out of the 400,000 commercials sold new every year. 340,000, or 85 per cent, are light commercials. The vehicles have a wide range of users, ranging from small traders to schools. The remaining 60,000, or 15 per cent, are heavy commercials employed mainly for haulage purposes. These vehicles typically cost hundreds of thousands of pounds, and are a major investment for any business.

The right vehicle
A major part of the job for a commercial vehicle dealer is working with their customer to help them specify what features they require for the vehicle they are buying. This can include the correct chassis configuration, carrying capacity, drive-line set-up and cab. They will also advise and provide quotes on more specialised elements, including the manufacture and supply of specialist bodywork and equipment such as cranes, tail-lifts, blowers, pumps and power take-offs.  
    
On a day-to-day basis, truck dealers’ main focus is on their service workshops. Unlike car dealers who are evenly balanced between sales and service, most of a truck dealer’s teams are involved in keeping a trucks down-time to a minimum. For their owners, a truck that isn’t working is losing income, particularly with the current high price of fuel in the UK.
    
The sales patterns for light commercials and trucks are diverging at present, as a result of current economic conditions.

Looking ahead
Looking forward, the current economic downturn is already having an effect on the sale of new commercial vehicles with light commercials seeing the bigger drop. Small vans are being particularly affected, partly because these vehicles are often bought on emotional reasons related to current business confidence.
    
Ford leads the light commercial market with a share of 29 per cent, made up mostly by its Transit range. Vauxhall has bounced back in reason years with a 16 per cent of sales followed up with Volkswagen at 9 per cent, Mercedes at 8 per cent and Citroen at 7.5 per cent market share.

Truck sales
The story with truck sales is different. On one side, sales of non-HGV 7.5 tonne chassis are down, but these are often sold to truck rental companies and rely on retail demand. On the other side, heavy truck sales are actually stronger with growth in the number of tractor units sold.
    
The lead time for ordering heavy vehicles, however, has been up to 12 months and things have changed as the economic downturn is effecting everywhere, so with the uncertainty of business confidence truck dealers could face cancelation of some of these long standing truck orders.
    
The heavy truck market is led by DAF with a market share of 23 per cent, their range going right down to sub 7.5 tonnes non-HGV chassis. Mercedes has 13 per cent of sales with a very strong customer preference for their tractor units, followed by MAN, Iveco and Volvo who all have 11 per cent market share.
    
The truck sector is focused on the long term, so despite recent economic issues, dealers will continue to invest in facilities to provide greater levels of service for their customers. Its more significant challenges relate to changes in legislative framework that surrounds the sector. A range of rules emanating from Westminster and Brussels have a major effect on both operators and dealers, not to mention the way they work with the vehicles themselves. The RMI National Franchised Dealers Association (NFDA) provides support and a route to government for our truck dealer members.  
    
We achieved a major victory for our commercial vehicle members earlier this year when we negotiated the lifting of a long-term ban on truck dealers taking customers’ articulated trailers for testing using trade plates and their own tractor units. The rules on operator licenses have been a big problem for truck dealers for many years. We worked with the Vehicle and Operator Services Agency (VOSA) and other government agencies to resolve the situation, and we are very pleased that a solution was reached for our membership as well as for the wider industry.
    
This highlights the work we do at grassroots level that is so important for the betterment of our membership, and the work that goes on still.