Fleet News

Newtown thriving after 30 years of expansion

A HUMBLE Bedford CF van may be a distant memory to most, but it holds a place at the heart of a 30-year fleet success story.

The Bedford van was Bedford's answer to the Ford Transit and was one of the first vehicles to join the fleet of Newtown Vehicle Rental when the company launched.

Founder Wyn Davies launched the company in 1974, with a fleet of eight commercial vehicles and seven cars.

Among the first vehicles to join the fleet, alongside the Bedford, were motoring classics including the Ford Cortina.

In keeping with the humble transport, the company began life in low-key surroundings, namely a disused pub with ample parking in Redditch (the new town which prompted the naming of the rental firm). Since that beginning, the firm has expanded into a major daily rental supplier and one of the 50 largest contract hire suppliers in the UK, with a fleet of more than 5,000 vehicles and pre-tax profits of about £2.5 million.

Davies, who was a branch manager for a large daily rental chain before he launched the firm, has been at the helm since its birth and now has his sights set firmly on the future.

It is forecasting 40% organic growth this year, with expected pre-tax profits of £3.5 million.

Specialisation, such as in the parcels sector, owner drivers and rail sector, has helped the company win and secure major customers, including Amey, Network Rail, Balfour Beatty and TNT.

It is now looking at opportunities to grow the business, including acquisitions and even a potential flotation on the stock market.

Davies said: 'There is a lot of work being done to add value to the service through the use of technology and allowing customers to interact electronically with us.

'We will continue to be focused on the customer. You have to keep this focus despite all the other demands you have placed on your time now compared to when we started.

'We now have to deal with the congestion charge, with two people just dealing with tickets, which is a big burden on a business of this size.'

Newtown now operates a wide variety of vehicles, ranging from cars to 18-tonne lorries, and offers services including daily rental, flexible leasing and contract hire.

Davies added: 'Newtown was one of the first companies to offer flexible rental. Its growth was driven by large companies, such as supermarkets, which wanted to hire vehicles at contact hire rates, but did not want penalties if they ended the contract early.

'It is an important lead-in product to other main businesses, because daily rental bookings can lead to orders for flexible rental and then for contract hire, so you develop a relationship with the customer.'

This also helps expand the company's customer base, as it is accepted that with daily rental, the catchment area is about five miles. With contract hire, the customer might be anywhere in the country.

The company now has about 145 staff sited at businesses in Redditch, where most employees work, Rugby, Banbury and Warwick.

The Rugby branch also houses the firm's remarketing operation, which sells about 150 vehicles a month.

The four sites are part of a streamlined business that was reworked in 2000 to better handle the company's continuing growth, hitting 500 units at the end of 15 years in business, to about 2,400 by 1999 and 5,000 today.

A new managing director, Philip Brindle, was also brought in to help with the restructuring and direct the company's next stage of growth.

Apart from the disappearance of the Bedford CF and Cortina, there are other ways the leasing and rental industry has changed while Newtown has been in business, according to Davies.

He said: 'The days when you might buy vehicles, rent them and then be able to sell them for more than you bought them for, or at the same price because of inflation are over.

'Also, vehicle reliability is very different and the competition seems to have really caught up with the Ford Transit.

'Customers have changed as well – they are getting more sophisticated and there are several players in the rental market which didn't exist when we started.'

The shape of the business has changed, with the majority of income now coming through contract hire, while flexible rental takes second place, with daily rental third.

Davies added: 'Our customers appreciate our commitment, flexibility and dedication. We now look forward to guiding the company to greater success.'

Continued investment helps Newtown win more contracts

NEWTOWN's focus on specialist areas has paid dividends, with a number of recent contract wins.

Last year, the utilities provider McNicholas awarded a 150-strong fleet deal to the firm following an evaluation of its fleet.

The deal saw Newtown supply 150 Volkswagen LT35 2.5-litre diesel vans on a long-term contract hire basis which will be used for McNicholas' British Gas Transco and Severn Trent contracts.

At the time, McNicholas director Ian Gay said: 'Having already experienced the high level of service and reliability offered by both these companies, we decided to award them a preferred supplier contract.

'We knew we could rely on Newtown totally when it comes to onsite back up.'

McNicholas provides services to the gas, water, electricity, rail and telecommunications industries and uses the vans as mobile workshops throughout the country.

Philip Brindle, Newtown's managing director, said: 'We were able to tailor the vehicles for this contract to accurately fulfil the specifications and requirements of McNicholas and our aim is to back this up with a level of service which is second to none.'

As part of its bid to win more business, Newtown has also invested in its own operations.

It recently announced that it was investing in a new 300-vehicle fleet as part of a series of new business deals for customers ranging from the popular carriers TNT and Business Post to the company Amey Fleet Services.

It will take on more than 300 Mercedes-Benz Sprinter vans worth more than £6 million at showroom prices.

The vans will be delivered to its fleet customers and also be used for the firm's own daily rental fleet.

The 311 CDI Sprinters are being sourced through Mercedes-Benz dealer Mudie Bond.

Davies said: 'Customer service has been Newtown's watchword and each of our quality and maintenance processes are subject to examination by the British Vehicle Rental and Leasing Association, which ensures the highest standards are maintained.

'Our customers appreciate these standards and it's these which have ensured we can forge plenty of great long-term relationships.'

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