Fiat builds 'foundations' ahead of new fleet push
16 July 2009
Fiat is about to announce a new plan to establish a credible footprint in the contract hire and leasing market, following a large-scale review of the UK business that involved a virtual withdrawal from fleet sales, especially daily rental.
"The issue we had with fleet was that we were selling cars and not even covering costs," said Fiat sales director Andrew Sproston. "So we concentrated on the economics and pulled out of daily rental operation, and we're in the process of putting a strategy together."
The new announcement is imminent, with the firm looking to target both the end user and contract hire companies. "The fleet market is not all about daily rental, and that's the message we've had to get through," said Sproston. Fiat fleet boss Adam Pumfrey was made redundant earlier this year, so the reshaped fleet operation won't include a dedicated fleet director role.
"We're looking at getting the foundations in place - there's no point selling loads of cars for market share but no money," Sproston told BusinessCar. "RVs are up and the cars are more desirable so we don't have to give discounts. Going back, it was a sale at all cost and it's taken us a long time to build back up from that."
The change will include a portfolio approach, with Fiat, Alfa Romeo, the Fiat Professional commercial vehicle brand and even luxury badge Maserati coming together as one offering.
"We were losing £50m per year as an operation," said Sproston. "Retail is profitable most of the time and it was very clear that we needed to change the network and focus on retail sales." But despite prioritising retail to rebuild profitability, he claimed corporate sales are vital. "To be successful in the UK you have to fix fleet, it's not like it's 10% of the market - it's dominant," he said. "Fleet is critical to our long-term success but we have to get it right. We have to engage with the end user and work with contract hire"
Part of this is Fiat Group meeting with the top 20 leasing firms. "People don't know our products, we need to become more professional and tell people this is who we are and this is what we do" said Sproston. "It's really about people saying, hang on, this brand is on the move. Otherwise there's no point in us being here."