Just four years ago, used truck dealers were dealt a series of blows that had their lots bursting at the seams. A deflationary business environment boasting low interest rates and a strong rand made it easier than ever for operators to purchase new vehicles. As a result, trade-ins were going down quicker than landing legs and used truck dealers were left more than a little non-plussed.

The pendulum swing
The past, as they say, is another country and used truck dealers are singing a different tune these days. "The used truck market is very buoyant right now," says Leon du Plessis, National Used Vehicle Manager, Scania Southern Africa. "The pendulum has swung and used trucks are now regarded as an attractive option now that the business environment has become more stringent."

The truth is, there are a number of factors influencing the sale of new trucks. The National Credit Act has made it more difficult for smaller operators to secure financing from banks and the recent series of interest rate hikes has put greater strain on cash flows, forcing buyers to consider cheaper options for their fleets.

"The growth in demand for both heavy and medium commercial vehicles has put new truck dealers under pressure," says Riaan van Wyk, Sales Executive, Volvo Used Truck and Bus Centre. "There are long waiting lists and with new contracts being signed, operators can't afford to wait several months for new stock to arrive from abroad and now readily consider buying a quality used truck in order to meet service level agreements."

Price vs. quality
According to Paul Veldman of MAN Top Used, "cheaper new Asian imports did have an impact on the market but operators have become more educated as to the importance of an established support footprint as well as the need for quality, not only in the vehicle, but in the buying, financing and insuring processes as well. The availability of a 'one-stop used truck shop' is highly sought after these days."

At the centre of the price vs. quality issue is the growing understanding within the transport industry that buying on price is the wrong way to go. "Customers are becoming increasingly aware of overall lifecycle costs on each vehicle in the fleet and factors like fuel consumption, down time and resale value play a big part in purchasing decisions nowadays," says Rodney Keyzer, Group Pre-owned Manager, Sandown Motor Holdings. "It all depends on the type of contract that is being serviced, its duration and the nature of the application."

It's a 'horses for courses' scenario then? "Yes," says Keyzer. "Established operators and those new entrants who are in it for the long haul will buy a quality used vehicle with a warranty and service history. There are those however, who are in the game for a quick buck. With short-term contracts in hand, they will buy almost anything, as long as it carries the required load."
 

MAN Top Used Centre in Centurion is a prime visibility site.

Where it's at
It's in trying times like these that the boys are separated from the men, says du Plessis. "Adverse operating conditions like the Credit Act, fuel price increases and traffic congestion are making it extremely difficult for all operators and only those with experience survive. The ability for any transporter to supplement his fleet swiftly is crucial under present operational conditions and I'm sure many are tempted to throw a cheap truck at the problem. Sadly, they fall by the wayside. Those who really do the sums know that dealer support is everything and it's these guys who are snapping up the contracts."

The booming growth in mining, longhaul freight (lots of cross border) and construction hauliage place very specific demands on the type of vehicle currently in demand. "There's huge demand right now for 410 to 480Hp 6x4 truck tractors," says Veldman, "as well as a shortage of quality used rigids."

The used trailer market is in much the same state, says Keyzer. "There is a huge demand for trailers but local manufactures have waiting lists running into several months. Used trailers are extremely scarce and if you're going to offer an end-to-end service, you need to have a trailer ready to roll with the truck you've just sold. At Sandown, we keep an inventory of new trailers for this very reason."

Smarties 
The crux of the issue, of how best to equip a fleet in pressurised conditions, is that used trucks do offer a viable solution. "A three-year old European truck with 800 000 kms on the clock that's come off a service and maintenance contract and sold through an OEM-branded dealer will cost the same as a new Asian derivative, but, it will still be good for another 600 000 kms. Plus, it will come with a warranty, be financed and insured in-house and it'll consume a lot less fuel. Most importantly, it will have a support base extending across southern Africa equipped with the parts and skills to keep it moving with minimal downtime. And, after 1.5 million kms, it'll still have a resale value worth mentioning," concludes du Plessis.