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Fiat adopts ‘simplified’ approach

Fiat dealers are bracing themselves for a difficult 2005 as the manufacturer implements a radical new business plan.

Last year saw UK sales down 2.7% on the previous year’s figures despite the introduction of the Panda and the Idea. Now it aims to focus on the retail sector while decreasing low churn fleet business such as daily rentals.

The carmaker is putting in place the new business model, which will focus on key models achieving better margins, but it is warning dealers that volumes will be reduced as a result, by up to 30,000 units.

“We decided that if we wanted to improve our business model, 2005 might well be the year to do it. We are aiming to become a much more simple and straightforward proposition to retail customers and dealers,” says Andy Rowe, the sales director of Fiat UK.

The plan involves focussing on the Punto and the Panda as core products, along with the Idea, which will be repositioned as a Punto MPV, although the name will remain unchanged. This will take pressure off low volume models like the Stilo, Multipla, Doblo and Barchetta.

Fiat UK will be simplifying the range and making the difference between trim levels much more obvious. The number of variants available will be cut from 74 to just 47.

To coincide with this, strong new consumer offers will be launched – the first being a four-year 0% finance deal with a £500 deposit on the Punto Dynamique range, designed to increase showroom footfall.

The Panda and Punto are expected to account for 72% of total sales this year, and Fiat expects this to increase to 84% in 2006. This shift will not be a simple one and consequently dealers’ targets have been reduced for the first quarter of this year.

“Targets have become more sensible for dealers and they are happy with this,” says Rowe. “We believe they will be more profitable and should be able to hit targets more consistently.”

The manufacturer is still looking to expand its retail network and hopes to add another 25 to 30 dealers to the current 175. Growth is also planned with existing partners.

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