RH Commercial Vehicles bought back by original management team

Logistic company Kuehne + Nagel has sold its Renault Trucks dealership RH Commercial Vehicles for an undisclosed sum a year after it bought its parent company The RH Group for £66.9m (CM, 21 July 2011).

The new owners of the East Midlands dealership, that employs 55 people, include its current MD Nigel Baxter (pictured left) and general manager Paul Pearson (pictured right), who becomes commercial director, as well as Neville and Peter Baxter.

Last year the dealership turned over £16m from sales, parts and servicing from its head office at Nottingham and its second site at Leicester which opened in 2010. “This is an exciting deal which allows RHCV the independence we need to develop our highly specialised business to meet the challenges ahead and to grow our company, profitably,” says Nigel Baxter

“Our sector has been severely effected by the recession yet RHCV has fared well. These are exciting times for RHCV and we relish the opportunity to move our business forward with plans that include the development of a comprehensive network of sites over the next 18 months,” he adds. 

Exporters and domestic buyers fight for the same used trucks

Domestic buyers and exporters will increasingly find they are fighting over the same pool of stock as the requirements of the two markets converge more closely, reports Steve Banner.

Gone are the days when trucks of any age could be sent overseas almost regardless of their condition. Import barriers now imposed by many overseas countries mean that only comparatively-young vehicles are admitted says Richard Mills, managing director of European Vehicle Sales: trucks that UK purchasers are often hungry for too.

 

“So far as the Middle East is concerned we’re talking 2008-vintage while with Russia it’s 2009/10,” he says. “It is still possible to send trucks dating back to 2005 to sub-Saharan Africa, but then you run into another problem: the banks there won’t fund anything earlier than 2006 so it is only cash buyers who are in a position to purchase anything older.”

Trucks dating back ten or more years can still be sent out of the country, but only as kits of second-hand parts in the majority of cases.

Nor is there any chance that they will be quietly reassembled and put back on the road when they arrive at their destination, says Mills. “The authorities have got wise to that one,” he observes.

Exporters still face one problem when competing with domestic purchasers however, and that’s their willingness to pay the prices the vehicles they are looking for can command. So says Peter Groome, director, used trucks, at Volvo Truck & Bus.

“They tend to have a limit of £20,000 to £25,000,” he says. Overseas buyers will lose out as a consequence if local bidders are prepared to pay more unless they are willing to up their threshold.

The UK used truck market is proving to be a steady performer at present says Groome, with plenty of inquiries being received for a wide cross-section of vehicles. “There are still lots of operators out there who never go anywhere near the London Low Emission Zone and are interested in Euro-3 trucks,” he observes.

Euro-4 is now mandatory for the LEZ as a minimum unless an operator going in and out of it wishes to face a hefty daily levy.

No used sales records are being broken, but there are no indications that the market is about to collapse either.

“Prices are stable,” Groome says. “They’ve not shown any real movement for the past five months or more.”

“I’m concerned however about the possible impact of the rising cost of diesel,” Mills says. “That has to be the biggest worry.”

“The market isn’t on fire, but it’s not suicidal either,” says Paccar Financial senior regional asset manager, Paul Young, who also expresses concern about the potential effect of diesel price increases. Funding a high percentage of all new DAFs sold in the UK, Paccar Financial has a significant role to play when it comes to the disposal of ex-contract used XF105s, CF85s and so on.

“At present things aren’t too bad, “Mills observes. “In fact if anything they’re picking up a bit.

“We’re still seeing people after Euro-4 models because they’ve got to go in and out of the LEZ,” he continues. “However the banks are holding back a little when it comes to funding deals and some customers are reluctant to commit themselves.

“They are on short-term contracts with their own clients and worry that those contracts may not be renewed when they expire,” he says. “As a consequence they are renting rather than buying:  and when they do decide to buy, they certainly don’t want to spend £80,000 to £90,000 on a brand-new one.

“A lot of the people we see are more much inclined to spend £30,000 to £40,000 instead and want something that’s 07/08/09 registered.”

EVS has traditionally specialised in second-hand Mercedes-Benz tractor units, but Mills has recently started to offer MANs as a lower-cost alternative.

“They’re quite a lot cheaper, often to the tune of several thousand pounds, but they’ll still get you into the LEZ and they don’t need AdBlue,” he remarks and says that EVS is not suffering from a stock shortage at present.

Nor is Volvo says Groome. “We can certainly satisfy the demand for late-plate vehicles,” he says.

“Fleets tend to dispose of any trucks they need to get rid of during the first quarter of the year so there are plenty of tractor units about now,” says Young. “Rigids however are much harder to come by.”

Matt Heath, general manager, fleet sales at Maritime Transport, and responsible for the company’s used truck disposal operation, reiterates a point he has made before: that in his view, the used stock drought dealers often complain about is largely a myth.

“Some dealers are selling Euro-5 vehicles for what I would describe as very cheap money: and if they’re so difficult to find in the first place, then I have to ask why they’re letting them go at such low prices,” he comments. “I can only conclude that they are under-selling the product and as a consequence undermining the market. I am seeing evidence of this on a weekly basis.”

The need for hauliers to acquire trucks that will meet the requirements of the LEZ continues to generate sales he says.  So does the need to replace vehicles that were not swapped as a consequence of the economic downturn and are past their sell-by date.

“Operators are now in a position where they have no choice but to change these trucks,” he says. “They’ve run them on for too long.”

Finance is of course an issue, and Maritime can help used vehicle buyers arrange it by referring them to an independent funder. “It is not the case that they cannot get accepted elsewhere however,” Heath stresses.

“What often happens is that they come to us with a finance deal already in place, compare it with what the funders we use have to offer, and usually go with them because they’re more competitive.”

Maritime has no shortage of demand for its late-registered tractor units – the line-up includes Scania R480 Toplines and DAF XF 105 Super Spaces – and drawbars, which are available with work if the operator wants it. “Sales are buoyant, no question about it,” Heath says.