I do not believe the cliche of the roller coaster representing the used truck industry is entirely accurate. While the used truck market has its ups and downs, a roller coaster does represent some degree of predictability — each rise (growth) is followed by a fall. But given what's transpired over the past five years, a better image is the wing walker on an old-time bi-plane.
As this decade began, “our” bi-plane was plummeting to Earth, thanks to a substantial overabundance of equipment on the ground. And there were more arriving nearly daily, whether from guaranteed repurchases, trade-back packages configured as “two used vehicles for every one new,” a sour economy, ballooning insurance premiums and high fuel costs that forced fleet bankruptcies.
It was as if locust-like swarms of used truck equipment were descending on many parts of the country. And perched atop this bi-plane were the used-truck values. Together, they were quickly reaching terminal velocity — particularly when it came to fleet trades.
During the descent that inevitably followed, the bi-plane's wings see-sawed back and forth as the wing walker — that is, the dealers — had to keep a balance between rapid inventory turns and declining used truck values.
If that weren't all, firing on the bi-plane's tale was the “Red Baron” of reduced financing sources. The finance companies that serviced the used truck industry in the late ‘90s had retreated.
A full-blown crash was averted when an unexpected ally arrived — the EPA's 2002 emissions standards. The decidedly underwhelming support of truck fleets for the emission-reducing technology requiredpushed them to the used truck market for equipment.
This lucky break pulled the bi-plane up, allowing it to regain altitude. And the wing walker's challenge became locating late-model, low-mileage equipment to fill the needs of these “new” customers. In addition to finding the wheels, equipment dealers had to purchase quickly, before another dealer would and at times, at a higher price.
The ascent was amazing and the recovery rapid as dealers turned around the bad sales years. However, clouds hovered above. The wing walker was now hunting for equipment, as there was an inventory shortage of low-mileage, late-model trucks.
Today, the bi-plane remains on this positive trajectory thanks to strong resale values. But the wings are wavering as some trade-ins are arriving with a new transmission technology: the automated transmissions. The questions now are: What is it? How do I sell it? Will the owner-operator, a primary used truck buyer, accept it? Had the problems with the first automated transmissions been resolved? Pushing the wing walker closer to the wing tip are two versions of automated transmissions, one with three pedals and another with two!
The arrival of the new automated transmissions speaks to a very urgent need for the used truck industry-training. Component suppliers are not providing sufficient training for used truck sales professionals.
The used-truck manager is on the wing tip trying to determine values for equipment with various “new” components, yet component supplier reps are nowhere in sight. They haven't gone to the used truck dealership to offer training on any of these “new” systems.
The footing on the wing tip remains all the more precarious because the '02 emissions-compliant engines will be arriving soon. And still the used truck sales professionals have not received the information they need from engine makers
While truck OEMs have dedicated individuals or staff available to offer support to the used truck community, component manufacturers seem to make used truck support an added responsibility for some field salesperson. This individual will receive a travel budget to attend such things as the June Truck Blue Book Conference. But that's not what we need. We need day-to-day input at the dealerships. The wing walker needs to get to the middle of our used truck bi-plane. To accomplish this, there must be product life support — not just new truck product support.