The first six months of 2019 has seen a softening in both equipment sales, and recent feedback suggest the truck market is also flattening.
However, despite the market tapering, dealer originated asset finance remains steady.
Finance volumes for dealers are ahead of last year, suggesting dealers and customers are finding value in arranging point of sale finance.
Low interest offers, deferred payments and structured finance options are being used by many dealers and distributors to assist customers in completing their purchase.
Dealer support The range of businesses seeking “point of sale” retail finance options and distributors looking for ways to better support growth in their networks is becoming increasingly diverse.
The expectation in the market appears to also be that a range of payment and funding options are available for truck and construction equipment purchases.
UDC equipment dealer national sales manager John Wragg says there are important aspects to consider in a flat market.
“Based on the April Reserve Bank’s Credit Conditions survey, credit availability is continuing to tighten across the market, particularly for small businesses and agri.
“Previously when credit availability was tight for dairy farmers, we saw more customers taking advantage of dealer finance offers, rather than applying for bank funding.
This highlights the importance of having clear point of sale finance on offer when the market is slowing,” Wragg says.
With customers continuing to become more time poor, their expectation that dealers can offer a “one-stop shop” for all their requirements continues to grow.
With this in mind, UDC is continuing to focus on improving its digital platforms and tools to help provide great customer and dealer experience, as well as ensuring that the focus remains on good customer outcomes.
Legislative changes There are a number of legislative changes on the horizon and while the focus of these is on consumer lending, the key message is on ensuring lenders focus on good customer outcomes.
For dealers who primarily focus on agri, construction equipment and truck sales to business customers, these initial impacts are limited.
But if you are dealing with any consumer customers, such as people on lifestyle blocks or owner drivers, it’s important to ensure you keep informed about these changes which may impact your business.
UDC will be watching the reform process closely and will look to communicate to its dealer network the practical impacts and implications of the proposed changes to legislation.
Committed spring deliveries Looking through to the end of the year, UDC aligned agri dealers advise they havestrong committed forward orders for spring delivery.
These are generally up over 2018 and demonstrates longer term confidence in the sector.
