THE LOCAL MARKET is the lifeblood of most truck equipment distributors. It is the home front where the battles are fought, where reputations are made, and where money is earned so that the bills can be paid.
But is that all there is?
It wasn't that many years ago that the truck equipment business was relatively simple. Truck body and equipment manufacturers needed a local presence, and they signed agreements with local companies to provide that presence — including marketing the manufacturers' products in their assigned territory, handling warranty work, stocking repair parts, and servicing the equipment.
Increasingly, distributors are looking beyond the local market and discovering customers that are regional and national in scope. Chassis pools have expanded the “pool” of potential customers that truck equipment distributors can reach. And ship-through programs have given some distributors the means to market nationally.
But there are truck equipment opportunities beyond local, state, and national borders. The world needs truck equipment.
We hear that a lot lately. The recent Heavy Duty Dialog and Heavy Duty Aftermarket Week, which we cover in this month's issue, had several presentations involving the global market. It is something that NTEA's Stephen Latin-Kasper has mentioned several times in his recent presentations on the market outlook, one of which will be reported in next month's Trailer/Body Builders. And it also was the subject of a special presentation at The Work Truck Show in which a representative from Brazil appealed to the U S truck equipment industry to consider marketing truck bodies and equipment in South America's largest market.
The recent decline in the dollar has given U S companies a notable advantage in international trade. According to NTEA statistics, two years ago the U S imported approximately $2-billion more in commercial trucks and trailers from Canada than it exported. That trade deficit was virtually wiped out last year as changes in the exchange rate made U S truck bodies, trailers, and equipment more competitive. Don't be surprised if the United States runs a commercial truck and trailer surplus with our Canadian neighbors next year. If we do, it will be the first one in many years.
And while Canada remains our largest trading partner by far, other nations are also showing an increased appetite for American-made truck bodies, trailers, and truck equipment.
For example, according to NTEA research:
Russia increased its purchase of U S-produced trucks and trailers by 95% last year.
Sales to China were up 20%.
Brazil bought 91% more trucks and trailers from the U S in 2006.
For truck body and equipment manufacturers, this is particularly good news. Truck equipment distributors, however, may find that the path to those export opportunities will require some creative marketing. But creative marketing also was required when distributors first got into chassis pools and ship-through programs. When they did, these formally local truck equipment distributors were able to extend their marketing reach far beyond the county line.
Market forecasts are pointing to a down year domestically and an up year for exports. Some companies may be able to use international sales this year to offset losses in domestic sales.
For companies that do not currently market internationally, looking past our borders probably will not be a solution for this year's sales declines. International marketing is something that takes time to develop. But through the help of local International Trade Administration offices and other sources, it may be possible to lay the groundwork and be ready for the next business cycle.
Financial advisors recommend international stocks as a way for just about any individual investor to diversify his portfolios. While international marketing may not be for everyone, some truck equipment distributors will find opportunities overseas this year. Not all local distributors have to be local. Some may find ways to sell truck bodies and equipment in places they never imagined.