A CULTURAL shift in vehicle ownership will continue driving a rental firm’s renaissance, its boss has told The Northern Echo.

Northgate says rising demand for lease and rental deals will be pivotal in revitalising the business’ industry standing.

Last night, chief executive Kevin Bradshaw said the clamour, allied to a management-led turnaround plan, will get Darlington-headquartered Northgate “on the front foot and really competing hard” after it lost ground in a growing market.

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The business is in the middle of a turnaround aimed at delivering fresh growth, with senior management changes matched by a push to strengthen sales and marketing operations.

Mr Bradshaw said the moves are already bearing fruit, highlighting a 2.8 per cent rise in closing vehicles on hire for the six months to October 31, which helped revenue grow 10.4 per cent to nearly £350m.

Highlighting today’s convenience culture, most notably the rise of online service Airbnb that allows people to lease or rent property short-term, he said the motoring sector is increasingly following suit.

“We think the market environment in the UK is, and remains, strong but we have needed to apply a lot of self-help to get Northgate on the front foot and really competing hard,” said Mr Bradshaw, who was formerly chief executive at Wyevale Garden Centres and UK managing director of Avis Europe.

“More than anything, it’s about helping the business to perform.

“What we are seeing overall is a shift from owning vehicles to renting and leasing them; culturally, people are less inclined to own a vehicle now.

“For your average small and medium-sized firm, if you buy a vehicle there is a lot of cash outlay and you don’t know how much you’ll get back at the end.

“That’s not the case if you lease.

“We can put the branding on the side of vehicles and fit things to exactly how customers want, so people do not feel like they need to own a vehicle anymore.”

According to Northgate’s latest financial figures, released yesterday, pre-tax profit was down from £40m last year to £31m, with underlying pre-tax profit falling from £40.4m to £33.8m.

However, Mr Bradshaw said he remains confident for the future, highlighting increased sales at the firm’s Van Monster division and its maturing Spanish operation, which has benefited from good rental demand in a stronger economy.

He added: “We do not see any particular slowdown in the growth of the UK market.

“We will continue to drive the transformation of Northgate in the UK and expect to see the company grow at least in line with the market over the coming years.”

Northgate, which sponsors British Touring Car Championship team HMS Racing, started life as Noble Self Drive in 1981, when Alan Noble set up business from his Darlington home.

It now has scores of branches across the UK, which include depots in Darlington, Stockton and Blaydon.