Northgate Vehicle Hire seeks customer feedback to give it the edge

Northgate has long been the bridesmaid at the Fleet News Awards, but finally it claimed the title of rental company of the year at the 2022 ceremony.

Over the past couple of years, it has undergone something of a business transformation, launching a suite of new products and services that, it says, are pitched perfectly to meet the needs of its customers.

How does it know? It asks them.

A recent fleet survey revealed that safety was a major concern. Consequently, last month Northgate launched SafeDriver, a risk assessment and training programme, complemented by compliancy checks and insight dashboards, all bundled together into one handy package.

Northgate prides itself on offering a full fleet management service, including aftersales and accident management, all managed in-house.

It’s a unique business proposition, says sales and marketing director Neil McCrossan:

“We have our own workshops, our own EV charge point company, our own driver training and our own telematics. The principle is: we do the fulfilment, not a third party.”

Fleet News: Northgate is a rental company that has increasingly moved into longer-term contracts via flexi-rent. What’s the benefit to fleets?

Neil McCrossan: The majority of our vehicles are now on flexi-rental plans and an increasing proportion are on our 12-month-plus product (McCrossan declines to give an exact percentage other than “it’s a significant proportion of our vehicle parc, but less than 50%”).

Our traditional flexi product meant fleets could return the van at any time with no penalty. However, the majority kept them for long periods of time. We created our 12-month product as an alternative to contract hire – it is more flexible and is competitively priced. The contract is for a minimum of 12 months, but customers can still return the vehicle early, if necessary, without a large penalty.

They can keep the vans for four years, sometimes five, but the typical cycle is three.

FN: Does this service include fleet management and SMR?

NMcC: Yes, it’s a standard part of the package. All the SMR is done through our own workshops. We also sell these services for customers’ non-Northgate vehicles – including cars – and an increasing number are taking it up. We beefed up the product proposition by developing our systems to provide the support information such as data dashboards and key performance indicators (KPIs).

FN: How has Northgate been affected by the supply issues and how are you supporting your customers?

NMcC: We see it carrying on for at least another year. We have been upfront with our customers about the delays; they have to order vehicles earlier, especially if they are specialised and they want significant quantities. But they also have to accept that they may not get them when they want.

Transparency is important. Customers are increasingly accepting stock vehicles where previously they always wanted new. The reality is our fleet has aged – we used to dispose at 42 months, now it’s 46, possibly 48 months and rising – because, while we are still in-fleeting thousands of vans, we can’t get as many as we’d like. But the demand is there, so we have to stretch the lifetime of our existing vans.

Where previously we might’ve replaced a van twice during a lifecycle, now it’s once or 1.5 times. Time will tell if we go back to where we were, but the model has changed.

Companies need to recognise that their fleet will age and think about SMR and support services.

FN: With the supply shortages, manufacturers are becoming more selective about their sales channels. Might rental companies be affected?

NMcC: We buy the majority of our vans, but everything will be governed by production levels and the channels. Manufacturers are looking at their rental volumes and the terms – those are moving elements. We have long-term relationships, and we will continue to be a major procurer of vans, but these are challenging times.

FN: How are you switching the emphasis away from a commodity-price customer relationship?

NMcC: Rental is no longer just about the van; it’s about the whole value package and the pricing applies to that. Customers get more than just a vehicle; we can offer them a comprehensive package and it’s all in-house with our own workshops. We have been working hard to add new services to the portfolio and not just be a provider of vans.

Customers used to choose suppliers; now, with the supply shortage, suppliers are almost choosing the customers. We want long-term relationships with customers we can work in partnership with, that understand the challenges, so we can come through this together.

FN: Where are Northgate’s  growth opportunities?

NMcC: There is no shortage of opportunities; the challenge is choosing the ones we want to take advantage of while we have supply issues. We intend to continue growing our vehicle parc. Extending the life of our existing vehicles releases the incoming stock to do new business with.

FN: Your latest initiative is SafeDriver – tell us about the programme.

NMcC: We commissioned some research which showed that customers are concerned about staff welfare and retention/recruitment.

They had a requirement for driver training, support and compliance. SafeDriver includes checks, such as licence and vehicle inspections, which give customers that degree of protection. It also improves driver quality and fleet efficiency through online risk assessment tests that build a portfolio which identifies where training would benefit the driver and the company. Training options include: online, face-to-face classroom and on-the-road.

SafeDriver brings together all the elements, including grey fleet, salary sacrifice and telematics, in one place with good data and KPIs that can be used for compliance and reporting. Over the next 18 months, we hope that 30-40% of our customer base will take it up.

FN: Last year, you bought EV charge point company Charged EV. How do you see that market developing?

NMcC: We are still in the early adopter phase for vans. Customers are nervous and there is a lack of knowledge, especially when it comes to charging infrastructure for work, home and public networks, speed of charging and reimbursement for home and public charging.

Many customers feel it’s just too hard, but we see it as our job to help them through. Charged EV gives us access to specialist advice and experience and means that we are the ones to fit the charge points to customers’ depots, offices and homes.

The business is already five times the size from when we bought it in terms of installations, and we expect that growth rate to continue.

Northgate has strong take-up of its ancillary services. Previously, customers were often buying from multiple sources, whereas with Northgate, it’s one point of contact, one relationship. And that extends to fleets who don’t use Northgate’s rental services; some only invest in its telematics offering or accident management, for example.

“We want to make it easy for fleets to solve any problem by offering them all the tools,” McCrossan says. “We can look after their fleet; we can increasingly look after their drivers as well.”

Sponsor’s comment

We’re delighted to have sponsored the Rental Company of the Year award for the sixth time. Congratulations to Northgate Vehicle Hire for winning this extremely competitive category.

The Grosvenor Group has been serving fleets for more than 40 years, and the Fleet News Awards reflect the range of incredible businesses and people in our sector.

As a group, we have an award-winning contract hire company (Grosvenor Leasing) and an award-winning fleet management specialist (Interactive Fleet Management). We also offer a market-leading personal leasing solution for drivers opting for cash.

Our panel of experts offers advice on all aspects of vehicle operation. 0Zone is our groundbreaking green solution to help companies move towards ultra-low emission vehicles (ULEVs) and electric vehicles (EVs), and we have an in-house software team developing fleet management systems and apps.

Lee Brown, managing director, Grosvenor Leasing and Interactive Fleet Management

Mary Dopson-Taylor, customer service director of award sponsor The Grosvenor Group, presents the award to Adam Naylor, UK head of sales, Northgate Vehicle Hire