A lot has changed in the ten years since Volvo first started selling used trucks officially as Volvo Used Trucks. In 2008, Volvo made the decision to take in their existing used truck business from the wholly owned dealers in an attempt to push up standards and make more of their second-hand products.
“Used trucks can often not be at the forefront of the business,” explained Carl White, national sales and brand manager, Volvo Used Trucks. “We wanted to drive the product forward and drive the standards up and that that was best done by being invested in by the company.”
The decision had been made many months before, but it turned out the timing was most fortuitous. As recession began to bite, Volvo Used Trucks suddenly found itself with a growing customer base as operators struggling with rising costs and shrinking rates became ever more cost sensitive.
They began by fixing the glaring hole in their portfolio – “there wasn’t a used truck person in London, the guy covering that patch was in Hythe on the south coast” – and opened a new facility to cover North London, Bedford, Oxford and the home counties.
“We analysed the market, moved things around, and made our structure fit better to our customer base,” White said.
There was also an investment in new sites at Wellingborough and in Glasgow with capacity for around 100 used trucks to supply the whole of Scotland. The business was split between North and South and over time more sales executives were recruited as the volumes grew.
The focus then shifted to improving the offer for their customers because according to White there was a very different experience regionally as well as differing offers. To counter this, Volvo Used Trucks looked at what the customers wanted most and discovered it was better preparation of the vehicles. The used truck brand already in use in Europe was examined and expanded upon and a 200-point check was quickly introduced for the newly named Volvo Select vehicles.
“We decided it would be better for the customer if the trucks came with a warranty rather than a mechanical breakdown cover. So, we introduced a three-month warranty, and took ownership of that coverage with a manufactured backed warranty on the vehicle rather than a third party. As time went on we decided we needed a middle tier of vehicles, so we introduced Volvo Approved with a three-month warranty, and extended cover to six months on Selected trucks.”
The following year, and with the growing success of the two used truck brands, Volvo increased its warranty terms for both Approved and Selected vehicles to six and 12 months, respectively. Three years later and with growing confidence in the product and aftersales services, warranty terms were increased once again to 12 months and 24 months.
“Our warranty, and the prep that goes into the vehicles, is what has driven the repeat business. You don’t find a manufacturer offering a two-year warranty on three- or four-year-old trucks. For Volvo, it’s not about moving the metal, it’s about providing the customer with the specification they want. It’s about providing the finance. It’s about maintenance. We’ve got so many different facets of our service.”
That additional service is now being extended to a warranty covering AdBlue systems in the same way that Volvo introduced coverage for clutch failures in 2016.
“We sat down with a customer, Brian Palmer Haulage, he’d brought a truck from us that clutch had failed during the warranty period, but it wasn’t covered. As a direct result of sitting down and listening to a customer we then introduced it under our warranty – if it breaks, but it’s not worn out. We do listen to our customers, and act upon it. We’ve had a number of customer talk about AdBlue systems, so off the back of feedback we’ve introduced it to our warranty.”
The way Volvo has approached the used truck market has certainly changed over the last decade, but during that time the world has also changed and having weather the economic downturn in 2012, Volvo Used Trucks was able to bring a unique offer to the market.
“In 2012 we introduced contract hire on used trucks. Apart from rental companies I don’t think anyone was doing that at the time. We put together some contract hire packages and sold more and more and more, and now, it’s everywhere.”
It’s not just the way Volvo Used Trucks sell vehicles that has changed during that time either, where they are being sold has also shifted. In the run up to the financial crisis White said the sales volumes of new trucks were huge but then it just stopped – “people were returning trucks and not taking new ones out”. Used stock levels understandably increased, but White says Volvo kept a calm head, choosing not to “have a fire sale and destroy trucks price in the market”. Instead they expanded their export operation, particular with fleet trucks, to relieve pressure on the UK market.
The aforementioned introduction of contract hire on used trucks also helped redistribute the returned stock, and gradually the situation was managed. Contract hire remained, - “It was perceived to be less expensive than contract hire on a new truck” – but exports have since dwindled.
“We don’t need it as much as we did before,” White said. “The volumes aren’t in the numbers they were before and we’re more aware that they’re going to come back - it’s a boomerang. That’s why Volvo take the long view. They don’t just sell as many contract hire in the way they used to.”
Lessons learnt, the Volvo Used Trucks business has continued to grow, now as the anniversary of its birth and the economic downturn are remembered, White believes a lot has changed.
“We’ll sell £1m of ancillaries this year. Ten years ago, that would have been nothing. In those days people would have bought a truck and taken it away to get fitted. Now we’re installing fridges and microwaves on nearly every truck that comes in. We can do that service now, and its done by Volvo so its warranted. A lot of it is to do with the way our mind-set has changed over those ten years. We’re no longer just trying to sell the metal.”