Implementing digital tachograph legislation has affected trade - and dealers having to warn buyers about what type of tacho was fitted has added insult to injury. "The government made a blunder by not insisting that, on a certain date, digital smart cards [for drivers] became mandatory," says Roger Peel, dealer principal of Iveco franchise Northern Commercials. "When they first came out, we had taxed vehicles standing in the yard. We would wait a few weeks before customers got a card - we sent letters to all our customers informing them of requiring digital cards."
But the rough patch is over. Peel predicts a turnover of more than £50million in the next financial year for the showroom in Brighouse, West Yorkshire, with more than half coming from new sales. "Aftersales have been lucrative, but the situation will soon be changing again, you mark my words," he says. According to the Society of Motor Manufacturers and Traders, total commercial vehicle registrations in 2007 rose 1.5% year-on-year - but truck sales were down 8.7% during that period. Look closer, though, and in December 2007 truck sales were up 29.4% on the same month in 2006.
Prospects are good
"Things are turning around - 2008 will be a good year. Customers have realised they can't keep their vehicles for eight or nine years. Over the past 12 months, customers have not been replacing when they should," Peel says.
Northern Commercials doesn't rely on fleet orders for its sales boom. Rental companies Hill Hire and Northgate alone qualify as its 'fleet' customers, and they carry out their own maintenance, he says the rest comes from small and medium-sized operators. "The money is in the small deals," Peel says. He has a broad small-order customer base as a result: operators and own-account names such as Bedfords, Brocklehurst, Nelsons, Sams Transport, SigmaKalon, Dysons and Sissons - pictures of which adorn the wall - provide the business. "We are above Iveco's national average in all our sectors - the Stralis has opened doors for us. Sissons, for example, switched from Seddon Atkinson and Foden," he says.
Retail growth brings more work for the aftermarket servicing and team, too. With Iveco providing repair and maintenance (R&M) on new stock deals, Peel acted quickly to ensure Northern Commercials' workshops would come out on top. "What with block exemption and everything, I decided 12 months ago that there was only one way to guarantee Northern Commercial's future business - and that was to underwrite our own R&M contracts, and have the flexibility to put on R&M. If I haven't got the flexibility to run my own managers, the contracts and costs are out of my control. My labour cost is different from Iveco's. I am in a competitive market and have to look at the overall running cost of a vehicle, and that is what the customer wants to know," he says. To monitor its 250 live R&M contracts, the company uses Inspector, an online facility. Meanwhile, the emphasis for vans is simply getting the customer back through the door. Northern Commercials' retail van outlet is in Leeds, where buyers are offered two years' servicing for £500. "That gets them back in for warranty work otherwise you never see them again," Peel says. As a result, he can ensure that aftermarket work is completed on vans as well as trucks.
Up through the ranks
Peel has worked his way up through the ranks at Northern Commercials, and was appointed dealer principal when the firm was bought by the Clipper Group in December 2005. He was there when it was a Leyland Daf franchise and when the manufacturer went pop in 1993, the dealership followed North East Truck & Van, and Sherwoods to Iveco. "It was a culture shock," he recalls. "We went from having a product we knew to a product we didn't. We went from a £3m parts holding to nothing. Still, we carried on selling Leyland bits until we built up the Iveco business. On the heavy side, there wasn't much new, but there was plenty of light commercial business. The Cargo had 40% market share, and a lot of new businesses came in. You've got to stay close to the customer and understand the customer's requirements - our mission statement is: 'Commercial vehicles from commercial people'."
Today Peel is at the heart of Iveco's relationship with its franchises: "I sit on the national panel for Iveco National Dealer Council, sit on the Customer Service Panel and am chairman of the Parts Panel," he says. The arrival of Iveco marketing director Andrea Bucci has been positive, he says, adding that the whole franchised dealer network will raise its game to meet the ambition of the manufacturer to increase its UK heavy truck market share to 15%.
"The arrival of the Stralis has been fantastic. Fuel-wise it's excellent, customers accept it and you don't see rusty ones running around. A five-year-old Eurostar looks five years old - but a five-year-old Stralis looks good as new. "The automatic clutch has gone down really well," Peel reveals. "We have always had a strong retail market, so customers have always bought what we have to sell - and we are attracting new custom."
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