Volvo buys NFC's truck rental fleet
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by Brian Weatherley and Miles Brignall • Volvo has become the first truck manufacturer to buy up a major truck buyer, suggesting manufacturers have started 1(x)king to acquire operators to guarantee sales. Earlier this week Volvo Contract Services (VCS) paid <£49m to NFC to buy its truck rental and contract hire business BRS.
The sale, which will be completed next month, will make VCS the leading rental and contract hire company in the UK and gives Volvo an instant market for its trucks.
Under the deal. VCS will gain 1,100 BRS rental vehicles plus 2,700 BRS trucks on contract hire and 153 staff.
But it is already predicting a major investment in the contract hire fleet that could see its size increased to 3,500 vehicles by 2001.
In the short-term both busi. nesses will continue to operate out of their existing 35 sites. In the longer term, however, they are likely to be placed at Volvo dealerships.
Volvo Contract Services boss Barrie Cload says the BRS name will be retained on both operations, along with an all-makes fleet policy.
Until now the only rental activity conducted by VCS was a modest franchising operation based on six Volvo UK dealers and involving some 600 trucks. However, Cload insists: "You can't run a profitable rental company if its small—it must be big."
17 Last year BRS's rental and contract hire business delivered a £4m operating profit on a turnover of £46m. Its fleet usage is claimed to be currently running at 87%, • The concept of truck manufacturers taking stakes in truck operators is not new. When NFC was put up for sale in 1982, one unsuccessful bidder put together a consortium of truck suppliers and one major manufacturer. The Government opted for a management buyout instead. Norbert Dentressangle, which runs an almost exclusively Renault fleet, may not have a financial interest from Renault but the two companies are thought to work very closely together.
With truck makers looking to secure sales in an ever-shrinking market, the Volvo deal could be the first of many. As one industry insider put it: "The idea that the manufacturers could get involved in haulage is not out of the question10 years ago they were not looking at contract hire, but that's all changed this week."