PORTLAND, Ore. – Buyers may already be losing their edge in the secondary truck market, as used truck inventories are drawn down and high-demand, technology-laden trucks are set to hit dealer lots.
Mary Aufdemberg, president and general manager of Daimler Trucks Remarketing, gave the truck press a used truck update Dec. 9, describing a chaotic year.
What was already expected to be a soft market – demand diminished and prices were under pressure coming into 2020, after a very strong 2018 – quickly became very “dynamic,” as Covid-19 crushed demand before a snappy rebound ensued.
“The good news is, we were really ready for a challenging 2020 before the rest of the world was,” Aufdemberg said. Prices crashed in February with depreciation occurring at about 8.5% a month through the first quarter.
But then Covid-related restocking efforts spurred renewed demand, even before it translated to surging new truck orders.
“It’s been a wild ride, from a low all the way to a high in this marketplace,” said Aufdemberg. She said prices are beginning to rise and inventories are decreasing. She expects further price stabilization and reduced availability next year.
The same trends exist in Canada. Aufdemberg said the sluggishness was felt here before in the U.S., but the trajectory of the recovery has been similar.
For Daimler Trucks North America’s SelecTrucks used truck dealer network, it was a year of growth. The brand added four stores, including one in Winnipeg – its second Canadian location – bringing the total in the U.S. and Canada to 30. But the buying experience has changed in response to the pandemic.
There have been more courtesy deliveries to avoid store visits, more of the financial transaction is done digitally, and trucks are sanitized to ensure a clean handoff. But the closure of licensing agencies has created difficulties in securing notaries and titling services.
“This year, my corporate stores have more than doubled sales so we are absolutely able to sell in an environment that is challenging like this,” Aufdemberg said.
SelecTrucks is touting advantages such as OEM warranties, access to late model, well-maintained trucks, and dealer knowledge as key advantages in the secondary market.
“We want customers to feel secure and confident when they purchase a used truck,” she said.
Aufdemberg also feels SelecTrucks is in a good position to thrive in the years to come as new Freightliner Cascadias – packed with the latest technologies – enter the secondary market.
“SelecTrucks has been a great place for customers to get their hands on some of that early, cutting-edge safety technology,” she said, noting the new Cascadia is the first model to come equipped with the Detroit Assurance 4.0 suite of active safety systems.
Next year, 2018 model year new Cascadias previously owned by large fleets will begin hitting the lots, and Aufdemberg is anticipating strong demand. About a third of 2018 model year Cascadias were of the newer variety, so supply will initially be limited, but the build rate climbed to 75% the following year. In addition to offering a newer version of Detroit Assurance, upgrades include a smoother ride, a more automotive dash, a new steering wheel, and maintenance enhancements such as fuses located inside the truck.
Aufdemberg feels demand will outpace supply through the first half of 2021, until the 2019 model year trade-ins begin to arrive. Meanwhile, SelecTrucks plans to add more locations. Its typical buyers are owner-operators, small fleets, some leasing companies and often, owner-operators who want to become small fleets.
“Where we love to see success from our customers is when we can help an owner-operator grow into a small fleet. We take a lot of pride in nurturing that business,” Aufdemberg said.
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