Fiat defends BSM deal
13 January 2010
Author: Hugh Hunston
Fiat's 3500-car a year contract with BSM is not "silly fleet business involving damaged RVs" according to the company's UK managing director Andrew Humberstone.
Humberstone, who said he personally sought re-assurances from value guides about potentially negative residual consequences, claimed: "This is arguably one of the best deals we have ever done. I can categorically and unequivocally say we have sold these cars (mainly Fiat 500s) at retail margins."
Asked to respond to claims by GM insiders that Vauxhall walked away from the deal because it was not willing to compromise margins, Humberstone said: "GM obviously had a different methodology and that is why it did not work for them."
He added: "With that volume of cars we will get 180,000 test drives annually. GM and BSM claimed a buying conversion rate of 70%; we are working more on the basis of 10%. At that rate it means incremental new and used business of 18,000 cars a year."
The head of Fiat Group in the UK said: "We have to dispose of around 4000 cars a year out of 30,000 500s and currently we have a demand backlog. They will not all come flooding in at once and are on buy back so we protect RVs. Before the deal I went to CAP and Glass's and said "please tell me if this will damage RVs?' They categorically said 'no, it won't'. "
"I am here to put the brand on the road and demonstrate we can enter fleet markets without doing silly business and damaging RVs. If the purchasing conversion rate is more than 10% then I make a fortune. At 30% I will have increase sales over budget forecast in one move with better economics than through my dealer network," said Humberstone.
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