Value-adds increasingly important to truck sales: report

MOUNTAIN VIEW, CA – A new report by Frost & Sullivan suggests the increasing price of new trucks is unlikely to significantly impact the viability of the North American class 8 truck leasing and financing market.

Rather, it believes, the market will see the rise of new solutions, business models, and revenue streams as OEM captives offer fleet management services and telematics-related value propositions to compete with non-captive firms.

The consulting firm believes services, parts sales and warranty contracts, in particular, will be revenue-generating services that offer the greatest scope for growth.

New analysis from Frost & Sullivan’s Strategic Analysis of the North American Class 8 Truck Leasing and Financing Market finds that most consumers still choose financing over leasing or cash, though it is not a dominant choice as it once was.

About 64 percent of all new class 8 truck purchases are financed, while 28 percent are lease-arrangements, and 8 percent are paid for in cash.

“While non-captives have historically been leaders in the leasing and financing market, the line between the two parties will blur as captive business strategies begin to mirror those of non-captives,” said Frost & Sullivan automotive and transportation senior industry analyst Wallace Lau. “This has resulted in unique service solutions being offered to consumers by both parties such as contract maintenance, extended warranties and fleet management services.”

However, captives will have to remain cautious in their business strategies as the risk of truck defaults or another economic downturn could lead to the downfall of any OEM. In fact, the slow pace of economic recovery has forced companies to delay capital expenditures for trucks until more robust growth takes root.

The firm suggests all truck sellers must deliver innovative packages to quell consumer concerns over payment options, access to credit, and service solutions.

“With fleets and owner-operators looking to streamline daily operations and improve overall efficiency and profitability, new opportunities have risen for OEM captives and non-captives to deliver customized, flexible services,” revealed Lau. “Captives and non-captives must position themselves as complete, one-stop service solutions to attract and retain consumers in the North American market.”

 

Have your say

We won't publish or share your data

*