Fleet News

CitiCapital Fleet closes its books

ONE of Britain's biggest leasing firm's, CitiCapital Fleet, has closed to new business following a review of the operation by parent firm CitiGroup.

The contract hire and leasing firm, ranked 28th in this year's FN50, has written to its fleet customers informing them of the decision to close the business down.

The firm's managing director Colin Tourick has also left the company, which employs about 70 people.

In the latter Mel Goodliffe, commercial director, blamed the decision on the company's market position, the available returns on investment and the potential for future European expansion.

He also highlighted the immense gulf that had opened up between the company's current position and the 100,000-plus fleets of the leading companies in the market.

He said: 'The market overall has been challenged over the past three years by a changing regulatory environment and residual value pressures on used vehicles.

'This has resulted in a flat contract hire marketplace. As a result of our market position, the state of the marketplace and the returns and growth this operation has been able to generate, CitiCapital is not able to justify continued investment and management effort to sustain this operation. In order for CitiCapital to truly compete in the fleet market in Europe, a pan-European platform needs to be developed.

'After a thorough review of the current UK contract hire operation it became clear that its platform and market position do not provide the foundation necessary to build a pan-European solution.'

CitiCapital is not selling the portfolio and will continue to manage all existing contracts. Initially this will be through the existing business unit but with a stated objective of appointing a third party management company. Fleets have been assured there will be no change to the current billing and payment arrangements.

A further announcement will be made if and when a suitable third party has been identified, the firm said.

CitiGroup is a global financial services company with assets of more than £791 billion, with more than 100 million customers in 100 countries.

It acquired the fleet business, formerly Associates Fleet Services, at the start of 2001 when it bought Associates First Capital Corporation, a global leasing supplier, in a £21 billion deal.

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