News from Kenworth: Kenworth Hosts Used Truck
Managers Meeting, Offers Advice on Current Market
NEWS RELEASE
FOR IMMEDIATE RELEASE
CONTACT:
Jeff Parietti, (425) 828-5196 jparietti@paccar.com
Kenworth Hosts Used Truck Managers Meeting, Offers Advice on Current Market
KIRKLAND, Wash., Jan. 4, 2002 - "It's basic economics 101," says John
Sheldon, used truck manager for Kenworth Truck Company. "There's a gross
imbalance between supply and demand. The glut of used trucks poses a
challenge for all of us in truck sales, and it's a challenge which will be
with us for awhile."
To help its dealership group, Kenworth recently hosted more than 60 used
truck managers to discuss issues and possible solutions to help customers in
both the selling and purchasing of used trucks. "Component suppliers and
other vendors were on hand to provide information that can help our
dealerships operate their used truck departments even better," explained
Sheldon.
According to Ron Lipman, chairman of Kenworth's Used Truck Advisory Council,
and used truck manager at Truck Enterprises of Harrisonburg, Virginia, the
meeting allowed him to exchange ideas with other Kenworth used truck
managers.
"Networking is really a key when it comes to used trucks," Lipman said.
"Selling trucks - new or used - is built on relationships. As we build those
relationships with other Kenworth dealerships, we can open up opportunities
to do business across the country. In addition, we can better understand
the value of different types of units. All of this is beneficial to our
customers when they're trading-in trucks, or when they're searching for the
right used truck for their operation."
Kenworth dealers are in an excellent position to work with customers on
their new and used truck needs. "The downturn in the economy has certainly
been felt in our industry, yet PACCAR remains strong and profitable," noted
Tony McQuary, Kenworth assistant general manager for sales and marketing.
"That's imperative to the continuation of product development and the health
of our dealerships. It's also good for the long-term interest of our
customers. Kenworth clearly has one of the strongest dealer networks in the
U.S. and Canada. We're actually growing while some others are retracting.
That's comforting to both used and new truck buyers as they can rely on
Kenworth dealers being there to support them after the sale."
"Our overall dealership strength is a big advantage," agreed Lipman. Our
dealership -- and this is true at other Kenworth dealerships -- goes through
trucks that are brought in on trade, inspects and cleans them, and makes
sure there are not any problems before they go out the door. We have a
saying that 'we have a building here and we plan to stay in it and be part
of the community.' That means if you have a problem with a truck, we're
here to take care of you. We have a reputation and image to stand up for,
and we want your return business. When you buy a truck from us, you're also
buying the reputation of the dealership."
Sheldon says there never has been a better time to buy a used truck. "There
have been major adjustments in used truck prices so there are some excellent
values available," he said. "Granted, Kenworth was hit by those same market
dynamics that caused other truck values to fall. However, we're still at a
premium because truck buyers recognize the quality and low cost of ownership
that a Kenworth truck offers, as well as a higher resale value when the time
comes to sell."
While there is a plethora of used trucks to choose from, it's another matter
when it comes to financing. "That game has changed," Sheldon stressed.
"There have been a lot of business failures and repossessions, so finance
companies have become much more cautious about new loans. We've moved out of
a period where many good business practices were discarded by companies
focused solely on selling product. Many of those past sales have become
today's issues.
"Now, we're in a period where there is no substitute for good sense and
sound business decisions," Sheldon said. "As a result, someone who is
planning to buy on credit should look beyond zero-down offers and look at
value and whether they'll ever have equity in their truck. That means the
realistic buyer should be prepared to pay a down payment for a used truck
and seek the shortest payment term possible. That's the best way to ensure
that you have equity in your truck, and it enhances your financial ability
to trade into another truck down the road.
Added Sheldon, "One final thought on financing: There is an old adage, if
the financing looks too good to be true, it probably is."
Sidebar: Spec'ing for Resale
If you're planning to buy a new truck, Sheldon offers some sage advice:
Talk to the used truck manager before you sign the contract.
"Decisions to optimize a truck for your operation might actually work
against you in the used truck market," he said. "For example, the Kenworth
T800 day cab with a large engine is a very high-demand truck, but I have
seen some on the used truck market that were spec'd with small engines for
bulk hauling. Used truck buyers generally prefer larger engines that are at
least 400 horsepower. So what owners realized in fuel economy, and payload,
they lost on the back end. The potential buyer of specialized equipment
must weigh the advantages of the customization in their application versus
its impact on resale value."
Words of wisdom? "Spec aluminum wheels, vertical stacks, and a premium
interior package. As for engines, either buy 'big' or buy an engine and
transmission combination where the engine can be up-rated electronically.
Fleet buyers should also consider Eaton's new 'convertible' 9-speed or
10-speed transmissions that can be easily converted into a 13-speed
transmission when the truck is traded. This way, the current customer can
enjoy the operational efficiency of a lower horsepower engine run through a
9 or 10-speed transmission, but reap the resale benefits of a 13-speed
transmission come trade in time."
Lastly, Sheldon advises, "the condition of your truck is extremely
important. There's no substitute for a well-maintained - and that means
keeping maintenance records - good-looking truck. If you care for your
truck, it will take care of you when it comes time to sell."
Kenworth Truck Company, a division of PACCAR Inc, is a leading manufacturer
of heavy and medium duty trucks. Kenworth's Internet home page is at
www.kenworth.com.
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CAPTION INFORMATION: John Sheldon, used truck manager for Kenworth Truck
Company.
