Nissan makes deeper impact
October 1st 2008

New Nissan UK boss, Geoff Philips, thinks the UK forklift market is now full, but still predicts 25 per cent growth for Nissan before 2012. With former Toyota dealer Impact onboard, and a full Atlet warehouse line, they might just do it... Brendan Coyne reports

Geoff Phillips claims he and Atlet UK chief Paul Forster were the only bosses to predict a slowdown in truck sales at the last BITA AGM. Yet he says Nissan will increase sales by 25 per cent before 2012. An ambitious target, given the slump, but not impossible with Impact Handling champing at the bit.

"With a dealer network that is now capable of taking on 200-300 truck deals we can go for more volume business, and it is my challenge to make that happen.

Although Impact is a departure from our traditional network, it is run in identical lines to our dealers. While Terry Kendrew (pictured left, with Phillips) is managing director of Impact as opposed to an owner, he is one phone call away. Their philosophy and ours are identical. And we want all the competitors trucks they had previously sold to be changed to Nissan – that's where a good chunk of our growth will come from." Another slice will come from the warehouse sales for which it now competes with Atlet. "Previously we had stepped around the Sainsbury's and Tescos of this world and concentrated on our core counterbalance product, which is what the dealers knew best. But as we are becoming more confident with the product and the application, and develop with a new, bigger dealer, [warehouse trucks] will deliver a fair portion of that extra 25 per cent." With the market approaching saturation, according to Phillips, and low unit price competition beginning to "nibble away at the edges", the coming year will be tough for all the major forklift firms and competition for business will be even more cutthroat. Which could put the squeeze on margins all round, but Phillips says Nissan is prepared.

"For any company in this type of market the balance is between making a margin and retaining your market share. It's good to have both, but sometimes impossible to have both at the desired level. There are negotiations on the table at the moment that we know all lift truck firms are fighting tooth and nail to get. If we have to reduce our margin to win a deal or maintain our market share we will do it knowing that the future of that deal will return the margins in years to come. But we will not make a loss to do it." Cash rich though Nissan may be, the demands of Mr Ghosn, Renault's CEO, are uppermost in everybody's mind.

"Whether we are manufacturing a Micra or a four tonne diesel, the same rules apply," says Phillips. "But we are looking at the volume deals and working with our manufacturing plants to determine what must be streamlined." Despite the crunch, the UK truck market, both users and suppliers, is afforded some protection by its very nature: trucks on five year rental contracts are already budgeted, and will be fixed at no extra cost when they break down. Which is why Phillips thinks low unit price imports won't tempt too many firms looking to cut costs.

"Whatever we may like to think, trucks break down. They need engineers and spare parts to keep them running, and the support only major manufacturers with established networks can supply. It's a reactionary market and you cannot react quickly from the other side of the world, so I think we will be safe for some years yet." While there are exceptions, notably Doosan, which has invested time nurturing its dealer network, Phillips says other firms from the Far East will struggle to attract strong dealers, "because there aren't many large, quality dealerships available. And if you had a considerable amount of money, and were looking to invest in a business, one would have to question whether a forklift business provides the most attractive return on that investment." On the flipside, Phillips believes, strong, financially-sound dealers and a recognised parent company make Nissan UK an attractive proposition, particularly when every penny counts.

"We are a high street brand that has delivered through good and bad times turning in a profitable performance and increasing market share. We have a network of eight dealers, all of which are sound financial companies; thousands of trucks in the market with no debts attached to them, and are cutting our cloth to suit the times. I treat this business as I would my home. If you haven't got the money, don't buy it." The banks could learn something from that. And Phillips says no news of Nissan UK's finance partner, BNP Parabas, in the papers recently, is good news. "We're very fortunate to have them with us. I think other firms have had to wake up and learn the hard way."

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