Kelly Sheehan On Awards, Surviving The Recession And The Customer/Dealer Relationship
June 1, 2009
BURLINGTON, Ont. - Each year, the American Truck Dealers (ATD) presents its ATD Truck Dealer of the Year Award. It's rare for a Canadian dealer to be nominated and equally rare for a female to find he...
ONE OF THE BEST: Kelly Sheehan was nominated as a finalist for the prestigious ATD Truck Dealer of the Year Award.
BURLINGTON, Ont. –Each year, the American Truck Dealers (ATD) presents its ATD Truck Dealer of the Year Award. It’s rare for a Canadian dealer to be nominated and equally rare for a female to find herself among the finalists at the awards presentation, held this year at the ATD Convention and Exposition Apr. 18 in Washington, D. C.
So for Kelly Sheehan, president of Sheehan’s Truck Centre, being named a finalist was a true honour – one she described in an exclusive interview with Truck News as the highlight of her career. We caught up with Sheehan to discuss the award, and how one of the top dealers in North America is weathering the current economic storm.
TN: Congratulations on being named a finalist for the ATD Truck Dealer of the Year Award. What has it meant to you?
Sheehan: It was a tremendous honour, so far it’s the highlight of my career. I’m one of only a few women and Canadians ever nominated for the award. This year there were only six dealers nominated out of approximately 3,500 eligible dealers.
TN:What was the experience like at the awards ceremony?
Sheehan: It was great. We were surrounded by fantastic people such as my fellow nominees. It was a great opportunity to meet them and have the opportunity to interact with them. My parents went with me. They were the founders of the dealership, so it meant a lot.
TN:These are trying times for the trucking industry, including truck dealers. How are you getting through? Who exactly is buying trucks these days?
Sheehan:We’re still seeing activity from smaller regional fleets that are in growth mode and there are some newer businesses as well.
It’s funny, in tough times sometimes people see opportunities out there and they’ll jump into business, so we have customers that are new to the business. Vocational season just started and some of municipalities are tendering jobs, and landscapers seem to still be quite busy and they’re buying trucks as well.
TN: As a dealer, how are you coping with the slowdown?
Sheehan: Fortunately, we operate five businesses under one roof. Typically, when new truck sales slow down the other parts of the business pick up like parts and service, we sell used parts and we recently ventured into leasing and that seems fairly busy. Parts and service picks up because customers tend to keep trucks longer through times like these so there’s more maintenance. And we’re a used truck dealer as well. Fortunately, we haven’t had to make any layoffs. All our people are well-trained, very experienced and ready to go when things pick up again.
TN:What kind of trends are you seeing when comparing new truck sales to used truck sales? Are fleets favouring used trucks due to the uncertainty in the market today?
Sheehan: Typically, new and used trucks run opposite cycles to each other. The only exception I’ve seen to that was the pre-buy back in 06. Both new and used were quite busy at that time. Typically, when new truck sales cycle down, used truck sales cycle up and that’s what we’ve been seeing the last couple of months, we’ve noticed a recovery in used trucks.
TN: How are life-cycles evolving? Are people hanging onto trucks longer?
Sheehan: (Hanging onto trucks longer) is natural in this type of mar- ket, it’s the first thing people start doing. It drives up their maintenance costs and we see customers cannibalizing trucks.
Unfortunately, they have trucks parked out against the fence and they’ll steal parts off them or park one truck that’s not working against the fence and drive one that is working until it breaks down. That has a real effect on a fleet, when things pick up again they have to get back out there and get all their trucks running. We see a lull in parts and service and then it takes off again.
TN: Can you comment on the dealer/customer relationship and your role in helping customers through difficult times?
Sheehan: It’s always an important relationship -long-term relationships in any business are vital. As a dealer, we’re in the best position to advise on truck spec’s , maintenance procedures and ways for fleets to minimize downtime. Most dealers offer one-stop shopping, so it’s very convenient for customers to deal with us. We’re very strong in used trucks, if a customer is downsizing its fleet we can buy trucks from them and when business picks back up we’re a good source of less expensive trucks to test the water with.
TN:With truck sales slumping, are some dealers resorting to questionable business practices simply to get a sale?
Sheehan: Not really. Most dealers that have been around for a while are honourable people.
I’d be wary of dealing with people that aren’t reputable dealers -they call them ‘curb-siders’ in the car industry -that seem to spring up around now.
You get people working out of the trunk of their car and I’d be leery of those people.
TN:The next round of EPA emissions standards will soon be upon us, and with them an increase in the price of new vehicles. Volvo announced a US$9,600 surcharge beginning in 2010. How will fleets deal with the increased capital costs? Will they pre-buy? Buy used? Or postpone purchases?
Sheehan: Volvo was first to announce (the cost) but some of the other manufacturers are now saying publicly that they’re going to be in same ballpark. On the good side, Volvo is going to be using SCR (selective catalytic reduction) so they’re confident that they’ll get better fuel economy and lower operating costs. On one side yes, there’s the increased capital cost of the vehicle but on the other side, customers will save money on fuel and operating costs. We won’t be at 80 cent/litre diesel fuel for long, so customers will have an increased payback over time. Hopefully the economy gets back on track before these increased capital costs become a reality. In the past, we’ve had customers try all three options. It comes down to what’s best for the customer. If you delay purchases or buy used trucks, you increase maintenance costs.
If you pre-buy, then you’re going to save up-front but you’re going to give up the fuel economy benefits.
You have to kind of weigh it out. If customers have the money to invest in the equipment, we’ll probably see them buying the new technology trucks.
TN: Much has been made about the competing EPA2010 solutions that will be available. Are customers gaining a better understanding of their options?
Sheehan: I think people are pretty well educated on it. Folks like you guys are doing a great job at making sure all the information is readily available. All the manufacturers are doing Webinars and putting information on their Web sites. I think customers understand, especially since almost all the manufacturers are in the same camp and only one manufacturer is in the other camp, I think it’s pretty clear what the industry thinks.
TN: Finally, what words of wisdom or advice do you have for your customers, many of whom are going through very difficult times?
Sheehan: Hopefully this doesn’t sound trite, but ‘hang in there.’We’re almost all the way through this. We’ve all been here before, we’ll be here again. Like in any business, analyze all aspects of your business. Track the weaknesses, focus on the strengths, work hard, work smart. Stay close to your dealer, we can help you through this.
We have a direct link to our products and OEM and we even sit in on the maintenance meetings of one of our fleet customers. The fleet talks about issues they’re having with the trucks and we are able to offer them suggestions on how to minimize downtime and improve the operation of their vehicles.
And we get a better understanding of the fleet’s challenges and focus our efforts on helping them. We’re the experts on our products, we have the factory-trained technicians, the tooling, we can fix their truck qu
ickly the first time, minimize downtime and their expenses.