LOUISVILLE, Ky — Arguing that a significant recovery of the new truck market can’t happen until the used truck crisis has been resolved, Freightliner LLC president and CEO Jim Hebe has announced several initiatives designed to rebuild the North American heavy-duty used truck industry.
And one of those initiatives calls for putting people behind the wheel of a used truck that would not have otherwise been able to get credit from existing lending institutions.
“We are tackling this problem head onWe are taking bold steps unlike anything seen before in this business,” Hebe said. “It’s hard to put into words the significance of this initiative. It’s a huge, huge deal. It’s something no one has taken the initiative to establish before.”
According to Hebe, the multi-pronged initiative which Freightliner is implementing along with the help of Mercedes-Benz Credit Corp., is aimed at increasing available capital for used truck customers, expanding the used truck customer base, increasing the model diversity within the used truck inventory and creating additional retail distribution outlets for used trucks.
“Our objectives are to protect residual values for our new truck customers, protect the investment of our used truck customers and increase demand for customers’ high value, late model used trucks.
Mercedes Benz Credit Corp. Canada is not part of the initiatives at the moment but, according to Hebe “we’re in pursuit of them. They’ll get it, trust me.”
Hebe announced six initiatives.
The first involves the creation, in partnership with Mercedes Benz Credit Corp., of a new finance operation. Called FASTruck, the new operation will look to help out first-time owner/operators whose credit rating wouldn’t be up to the standards of other lending institutions.
“One of the leading causes of the current used truck crisis is a lack of available credit for qualified first-time buyers or other established truckers who have credit availability issues,” Hebe said. “There are people out there wanting to enter the trucking business, or, who would like to trade up to later model used trucks, but they can’t find the financing. Very few finance companies are left who are really committed to helping those potential buyers.”
Hebe also vowed that FASTruck will not charge exorbitantly high rates to these higher-risk truck owners, as would be typical with other financing institutions.
“Payments are the issue, not interest rates,” said. “We will monitor their business practices, follow up with them day after day to make sure they stay in business.”
The second initiative will establish a network of remarketing centres across North America. The new retail system will be targeted at rapidly returning trucks to the market returned to Mercedes Benz Credit as off-lease vehicles and repossessions.
“These trucks must be directed quickly to the retail chain,” Hebe said, otherwise they end being sold at auctions which greatly reduce their value.
The third initiative is to work with Mercedes Benz Credit to secure higher loan amounts for established owner/operators and small fleet owners purchasing used vehicles. The higher advances will be available to qualified truckers purchasing used trucks at Freightliner, Sterling and Western Star dealers, as well as at Freightliner” SelecTrucks used truck outlets.
Fourth, Freightliner introduced two purchase programs for O/Os. The first, called Power to Succeed, is designed to help new O/Os or current truck owners moving up to a newer truck succeed in business. The second, SelectOne, is geared towards providing experienced O/Os and established small fleets a choice of benefits, such as added protection against breakdowns, to address their business needs.
The fifth initiative calls for Freightliner to expand its used truck refurbishing and reconfiguring operations for used trucks unveiled last summer. The company is looking to add more such operations across the U.S. and is also looking at Canada to address the problem of the high U.S. dollar making it difficult for Canadian buyers to get into a truck refurbished in the U.S.
Finally, Hebe said Freightliner will “dramatically” expand its SelecTrucks used truck network, first opened in 1997. There are currently 36 SelecTrucks Center locations in North America. By March 2002, that number will approach 60, Hebe vowed.
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