Residual value bias widespread, says Fiat
23 March 2010
Alfa Romeo MD Andrew Humberstone
Fiat's boss has queried why rival brands are able to escape RV damage for their "aggressive" action in the corporate market.
"There's no emotion here, it's all about data," said Fiat Auto UK managing director Andrew Humberstone. "But there's a lot of flexibility with other manufacturers and their residual value setting versus the discounts given to the industry.
"My feeling is, what are the rules of engagement? We can't have a different set of rules, and residual values should be set on actual data. What we are doing is correct and we're getting good RVs, but we're not seeing reductions in RVs for some competitors that are being more aggressive with fleets."
Although he declined to point the finger at specific rival manufacturers, Humberstone said leasing companies are reluctant to take the necessary corrective action in RV terms, as they are over-exposed to a particular brand.
"I'm not being controversial, I'm just asking them to explain, so I know what I can and can't do," he said.
Humberstone claimed some major brands had recorded registrations as high as 80% weighted toward fleet rather than retail in February, although figures seen by BusinessCar indicate the manufacturer with the highest ratio was Ford with 77.4% of registrations classed as fleet.
Responding, a Cap spokesman said: "Fiat product has consistently improved recently and our forecasts reflect this with significant uplifts in 'pound note' terms. Only in terms of percentage retention has there been little or no advance and this has been driven by list price increases."
Another RV expert BusinessCar spoke to said: "Fiat needs more time to show a consistent approach and deals such as the one it did with BSM don't help." Last year Fiat struck a 14,000-car deal with driver training giant BSM. At the time Humberstone claimed the deal would not hit RVs.