Northgate aims to make major inroads in Europe

Mar 18 2008 by Andrew Mernin, The Journal

VEHICLE hire firm Northgate has revealed plans to make further inroads into Europe after becoming the largest firm of its kind in Spain.

After just two-and-a-half years’ trading in the Spanish market, the Darlington-based business has become the largest commercial vehicle provider in the country.

The firm now plans to expand its reach into new European markets on the back of ongoing rapid growth and the launch of a new “sale and rent back” scheme.

In the midst of tighter economic pressures on UK firms, Northgate has launched a service which allows businesses to sell their vehicles to the hire firm and then rent them back as and when required.

The scheme will offer companies flexibility by allowing them to remove a fixed cost from their balance sheet and will also help Northgate diversify its revenue stream ahead of tougher economic times ahead.

Marketing director Ross Clarkson said: “In Spain we have made several acquisitions over the last five or six years and through organic growth we are now the largest vehicle rental company in the country.

“We would expect to expand into a new European market this calendar year, we are looking at the traditional mainland countries – France, Germany, Italy and are also looking at Eastern Europe.”

“We developed the sell/buyback service in response to the current economic climate with the credit crunch and financial turmoil and it enables fleet owners to effectively outsource their fleet rather than complete ownership.”

Meanwhile, Northgate is reportedly conducting trials on lighter vehicles in which the traditional ply-wood lining had been replaced by plastic in a bid to drive down emissions and fuel costs.

As the US banking crisis sent shock waves across global markets yesterday, shares in Northgate plunged 23.5 points to 579p.