2Minimum-term hire – selectively gain share
Why this is important:
With a low share of a fragmented market, there is significant opportunity for us to grow, and we can serve this market with limited variations to our operating model. We offer a range of minimum-term commitments with levels of service typically associated with flexible rental, these are attractive propositions to cross-sell within our existing flexible customer base. Most medium and large fleets have a requirement for both flexible and minimum-term rentals. Minimum-term is also the natural landing point for customers who transition from vehicle ownership to term-hire. Customers no longer feel the need to own their vehicles outright and are attracted to the upfront cash flow advantage, predictable cash flows, and the potential for whole-life costs to be lower than ownership.
We continue to see this as a substantial opportunity for the future for Northgate, as the market is twice the size of the flexible market and growing faster. We continue to invest in targeted marketing in each territory to support the transition from ownership to term-hire where adequate returns are achievable.