Upbeat UK truck market forecasts despite Gulliver’s collapse and Brexit mayhem

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Despite the uncertainties of a disorderly UK exit from the European Union seemingly increasing day by day, truck market pundits are more upbeat about 2019 than might be expected.

This at least is the strong impression given recently in separate end-of-year reviews by the bosses of two rival UK truck sales and marketing operations.

They are also apparently unfazed by last month’s collapse of a long-established big truck rental and contract hire business (Gulliver’s Truck Hire).

DAF and Renault both confident

Robin Easton, managing director of DAF Trucks (the top-selling manufacturer in the UK’s six-tonnes-GVW-plus truck market), was speaking in London last month.

Robin Easton from DAF Trucks
Robin Easton, managing director of DAF Trucks UK

Easton expects the total number of new trucks registered in the UK next year to be between 41,000 and 42,000, “but with a little more emphasis on rigids, reflecting their use in clean air zones (CAZ).”

This would make the 2019 UK truck market roughly the same size as last year. Easton makes plain, however, that his forecast is based on anything but “a catastrophic no-deal Brexit scenario.”

Speaking at a separate London event a few days earlier, the recently appointed new managing director of Volvo Group’s Renault Trucks UK division, Carlos Rodrigues, struck a similarly upbeat tone, though he declined to forecast an overall market size.

Carlos Rodrigues, managing director of Renault Trucks UK
Carlos Rodrigues, managing director of Renault Trucks UK

Like Easton, Rodrigues reports that his order book for new trucks is strong, even though the latest registration statistics published by the Society of Motor Manufacturers and Traders (SMMT), for the first nine months of 2018, suggest that truck sales overall are down by more than 7% compared with the same period in 2017.

Renault Trucks registrations are down nearly 12% year-on-year in that nine-month period. The fall in DAF Trucks registrations is even steeper at nearly 17%, but a market share of more than 27% still gives the Paccar subsidiary a commanding lead over second-place Mercedes-Benz at the top of the UK truck registrations league table.

“2018 has been another great year for DAF,” says Easton. “As we forecast a year ago, the total market is slightly down on the 45,000-unit market of 2017. Because we are so strong in the rigid truck sector, the more pronounced downturn here will impact our overall market share.

“But the good news is that our level of incoming orders this year is the best since 2007, and this in a year when registrations are down. Despite Brexit concerns, operators are continuing to invest in new vehicles.”

Genuine expansion or advancing existing plans?

What remains unclear, and what is worrying some analysts, is how many of these orders are being brought forward by fleet operators fearful of the tariffs and therefore steep price rises that could follow if the UK departs the EU in March without any trade agreement in place.

If a large number of fleets were forward buying in this way, the almost certain outcome would be a collapse in demand for new trucks in the second half of next year.

At Renault Trucks UK Carlos Rodrigues sees no point in fretting over things over which he has no control. “As of today, the 2019 truck market is unpredictable,” he says.

“The newly-formed Renault Trucks Europe division (excluding France) has significant growth ambitions and sees the UK and Ireland as key to these. We are the second biggest market in this division after Spain and our ambition is to be number one.

“Renault Trucks as a brand is preparing for a hard-Brexit scenario and we are focused on securing continuity of operations for our customers, including parts availability.”

Renault used truck division

Rodrigues is especially pleased with the performance of the Renault Trucks UK used vehicle sales operation over the past twelve months.

“There’s no denying that 2018 was a challenging year for us in this field, with return volumes high,” he says. “But we’re delighted to have been able to echo the strong sales performance of the new Range T in the used market.

“In 2018 we sold around 500 more used Range T trucks than in 2017. The key to our success in this area has been our ability to secure conquest business, with 50% of sales to new customers compared with 30% in 2017.”

Gulliver’s travels come to an end

The fragility of the UK’s new and used truck markets in general and the impact in particular that spikes in lease vehicle returns can have was underlined again last month by the collapse into administration of Gulliver’s Truck Hire.

This Bristol-based firm had been trading since 1960 and last year had around 4,500 commercial vehicles supplied to operators on short- and long-term contracts. More than 300 employees were made redundant last month when administrators from KPMG were called in.

Gulliver's Truck Hire Mercedes-Benz tractors

“It is very difficult to see a family business unable to carry on trading, especially at this time of year,” said David Pike, KPMG partner and joint administrator.

“Unfortunately, the Gulliver’s team faced significant challenges in tough market conditions. Despite efforts to deliver a turnaround and reposition the business, further losses have been incurred.

“This has impacted cashflow and led to the directors taking the difficult step to appoint administrators.”

The £95-million turnover company made a pre-tax profit of £4.4 million in 2016, but this turned into a pre-tax loss of more than £200,000 in 2017. Speaking early last year, managing director Philippe Harding blamed Gulliver’s financial woes mainly on “an oversupply of tractor units in the market place.”

The Gulliver’s administration came about nine months after the crash of a similar-sized truck rental and contract hire business at the other end of the country. Around 400 employees of Airdrie, North Lanarkshire-based TOM Vehicle Rental were made redundant when it collapsed in March 2018.

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Tim Blakemore
Tim Blakemore is an award-winning automotive journalist and the former editor of our sister title, Commercial Vehicle Engineer magazine. He is also the UK representative on the panel of judges for the biennial, pan-European Trailer Innovation Award scheme.

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