CV dealers advised to stick to business fundamentals

Dealers of second-hand commercial vehicles are being advised to stick to the business fundamentals of knowing their local market and supplying the vehicles in demand to avoid the worst of the downturn.

George Alexander, Editor of Glass’s Guide to Used Commercial Vehicles, asserts that, regardless of how poorly the wider economy is performing, provided the stock being offered is correctly priced to meet the prevailing conditions, good profits can be taken.

“For vendors, remaining positive in the face of some fairly scary numbers will require a greater leap of faith,” he suggests. “If the next couple of months are going to see demand slipping further, at a time when supply grows and business is traditionally slow, then the first requirement is to keep a cool head.”

He continues to explain that, while cash is tight and confidence low, selling price becomes a critical factor affecting dealer profitability.

“Therefore, when times are hard, the trick is to offer customers what they need, at prices they can afford. This may mean selling a wider spread of stock with greater emphasis on the value for money end of the mix, or possibly looking at model types that traditionally were not offered.

“Dealers holding stock that will not shift, and which already owes them too much money, should put it back into the market. The cash released can then be invested in vans that will appeal to cash strapped customers.”

He concludes: “As long as the retailer’s strategy is based on sound business fundamentals, trade will continue and deals can still be finalised. By being proactive, traders can prevent the domino effect of weakness leading to the wider market grinding to a stop.”