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The 60-member Leyland Truck Distributers Association is able to exert influence on the major British vehicle manufacturer. Allan Winn reports • The fact that the chairman of the Leyland Truck Distributors Association has his headquarters less than 10Iun from Leyland's main factory in Lancashire is probably co-incidental: but it somehow typifies the closeness of the relationship between Leyland and the people who sell its trucks, and the dependence which they have on each other.
The LTDA is a club whose members are the 60 Leyland trucks distributors in Britain and Northern Ireland. It does not embrace the special Roadrunner and service dealers who make up the rest of Leyland's 132-strong sales and service network. The present LTDA chairman is Sam Newton, managing director of Lancashire Leyland distributor Gilbraith Commercials, Newton — who is in his second three-year term as LTDA chairman — has a reputation for blunt speaking, both to his fellow distributors and to Leyland's management. That style is reflected in the public profile of the LTDA; it is the most widely-known and vocal of the manufacturer dealer associations in the country. Certainly, few dealer organisations produce their own publicity material and sell themselves to the outside world as 'dealer organisations as the LTDA does.
MARKET SNARE That is all very well, but of no practical use unless the publicity-conscious dealer organisation achieves better results than others. Newton points to Leyland's recovery of market share — if not total sales volumes — as evidence of the achievements of the dealer network, and of Leyland itself. He also says the association can claim real influence with the factory.
The main committee of the LTDA — 12 of the 60 managing directors of distributorships — meets twice a year with the board of Leyland Trucks. There are three sub-committees with specific areas of interest — sales, service and parts. These meet four times a year each, and five regional sections also meet at least twice a year.
From these meetings come ideas and opionions on everything from the strategic (was Leyland right with its original concept of independent Roadrunner dealers?) to the detail (is the change quality right on the Roadtrain's Spicer gearbox?).
BETTER SERVICE So what is it like being a Leyland dealer or distributor? For a start, says Newton, it's much better than it used to be. He cites things such as the wait for ordered vehicles, which could have been anything up to nine months. Now, he says, "we can get almost anything we want in eight weeks."
The same improved level of service is appearing with parts supply: "because Leyland is getting better at manufacturing and supplying parts," says Newton, "the distributor can destock without affecting his standard of service." There is a parallel there with the supplying of vehicles — with sales volumes rising again but no increase in stocks, a better level of efficiency is possible. Newton says the company has been working hard at identifying the parts which distributors or dealers must stock.
Newton's own company is probably better placed than most distributors, as its vast old mill building has "a lot of space" for storing parts. At the moment, says Newton, Gilbraith Commercials has a parts stock worth nearly £1.7 million, for current vehicles. (To put that in perspective, the stock of new vehicles held at Gilbraith's Chorley site is normally worth g2-3 million.) With older stock Leyland helps with write-down schemes involving, for instance, credit against new stock to keep such holdings at sensible value. Old stock is otherwise disposed of outside the country, says Newton, and not to those who might compete with Gilbraith.
While it might seem that Newton is happy with his lot as a Leyland distributor, there are areas where he feels that Leyland could make further progress to the seller's benefit. One of those is a further rationalisation of the model range. That applies especially to options, where Newton feels there could be a tightening up, especially among the lighter end of the range. While engine and gearbox options might be necessary for Roadtrain, there should be a "standard" model which would be, by definition, cheaper. He notes that on leading imported makes there are no proprietary engine options. "If you buy a Mercedes, you get a Mercedes engine; if you buy a Volvo, you get a Volvo engine," says Newton. He then points out that the two biggest sellers in the Leyland range — the Freighter and Constructor 6 — are vehicles which do not have proprietary engine option (disregarding the Daf engine option for Constructor 6 mixer chassis).
Much more important to the average seller of commercial vehicles is the price which can be got for them and the profit which can be made on selling them. Newton reckons that the retained average on turnover in the industry is "less than STD".
ALLOWANCES He points out that the customer has become used to discounts and manufacturer allowances. "It's what they pay at the end of the day that matters," he says, noting that nearly every customer knows about the allowances which the distributor or dealer can get from the manufacturer, and that "there is no way of stopping it".
Newton says that the customers have got used to getting a particular discount — for example, 20% — and are not happy until they do, no matter what the starting point in negotiations is. They expect the dealer to take the discount out of the allowance if necessary, he says, even though the dealer might already be making a loss on the deal. "We'd all like to get away from allowances," he says, accepting that nobody sells at retail list price anyway.
Newton warns, however, that "the deal is not the only thing" — as might be expected from someone in the dealer network. He is obviously extremely conscious of the threat to the traditional dealer business from new ways of obtaining trucks. Unlike some manufacturers, he says with relief, Leyland has resisted the pressure to let big-order customers buy direct and do their own warranty work and contract maintenance. He argues that such deals can harm the existing network and that if the customer insists on such deals it might be best to ignore the potential sale.
All this assumes that the customer is going to buy anyway — not a safe assumption in a world where contract hire and leasing has become important. Gilbraith has been in the leasing business for 15 years — it started as a perceived aid to sales — so it's not new to Newton. He describes it as having been restricting at times, but through leasings "we have helped a lot of people into business". Now, however, the big customers can probably get better finance deals than can Gilbraith itself.
That said, every quote which goes out from Gilbraith these days for the supply of a new vehicle covers the option of outright sale, lease, contract mainten,nr:. or a full contract hire package. All th, costings for these quotes are done on a computer system for which Gilbraith itself originated the program. In the
independent-minded North West, 75% of all deals done by Gilbraith are still for outright purchase of vehicles, and only 1015% of those deals incorporate contract maintenance. 0