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Hitachi Capital's boss has revealed details about the firm's aspirations to tackle the SME market, and how it was bolstered by absorbing a large chunk of SME business from the now defunct Lombard Vehicle Management earlier in 2013.
Speaking to BusinessCar, chief executive Simon Oliphant explained how the acquisition kick-started the leasing firm's expansion into the sector: "At the time [early 2013], talking to the guys from Lombard, their remit was to run out the rest of the fleet.
"They sold off a couple of discreet customer portfolios but it still left this rump of SME, which was about 9000 vehicles.
"The plan was to run that out in a kind of long-tail approach, but they contacted us in the early part of February to say 'we're actually reconsidering that' and would we be interested in an accelerated exit and would we be interested in buying the portfolio?' And we said 'yes'."
Hitachi had already taken on a catalogue of RBS [Lombard's parent company] vehicles from Lombard in 2012, shortly after the firm's announcement that it intended to exit the marketplace, which Oliphant believes helped to secure the deal.
"One of those things was having a proven capability to do it. We could apply all those things we used in the RBS transfer to the Lombard portfolio, and the only difference is we weren't transferring one customer - we were transferring circa-3000 customers, but the same principals apply."
Oliphant added that he had considered the possibility of such an acquisition in advance of the moves, and that there were still some funds remaining: "The year before I'd been over to Japan to talk about organic growth, but also, if the opportunity came up, to do an acquisition - I wanted the opportunity to do that.
"I said I thought there would be an opportunity and I basically got a fund of £100m signed off by Japan, so I could demonstrate to Lombard that we had the funding in place. And that fund is still available, or the remains of it; we didn't spend it all on Lombard."
Oliphant said the firm is now keen to ramp up its SME business following the move: "Looking at where we want to take SME, we're quite happy for it to represent 25% of our business, which will mean, if our growth plans go according to plan, anything up to 30% of our fleet size over the next five years.
"But if that takes six years it doesn't really matter - we'd rather do it right. It's less than 5% at present."
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