Fiat’s recent announcement that it is to supply Britain’s leading driving school with a 14,000 strong fleet of stylish Fiat 500s as part of a four-year deal is in line with the company’s local market strategy, according to managing director Andrew Humberstone.

Fiat’s recent announcement that it is to supply Britain’s leading driving school, BSM, with a 14,000 strong fleet of stylish Fiat 500s as part of a four-year deal is in line with the company’s local market strategy, according to managing director Andrew Humberstone.

While thanking staff for helping to bring the deal to its successful conclusion, Mr Humberstone commented: “This landmark agreement forms part of our strategy to re-enter the fleet market on favourable economic terms while ensuring residual values are maintained. We have brought about a fundamental change in our way of working which has resulted in our company exiting negative contribution margin business. This has allowed us to focus on retail customers and lay the correct foundations for new fleet business initiatives. This new partnership with BSM marks a significant return for us into the fleet sector and continues our strategy of commercial growth, the driving influence of which is sound economics, not purely volume.”

For some time, Fiat has been keen to address key elements of its brand strategy, such as targeting a youthful customer profile which will now take the company to the heart of Britain’s High Streets and into the minds of BSM’s learner drivers, some 130,000 of whom enlist to pass their test with BSM every year.

Mr Humberstone continued: “We know that some 70 per cent of all new drivers buy the brand of car in which they learned to drive, so our opportunities for new and used car sales are extensive. Furthermore our agreement with BSM includes a special offer for L-drivers wishing to purchase a new Fiat once they have passed their test, making our range even more accessible and economical for new drivers. Our strategy is not just about selling cars as we have been carefully developing a more strategic approach so as to encourage partnership agreements. As a simple rule of thumb, if we are not making money at a local level, we would not be interested in competing for the business. Our plan is to take the brand up to a higher level. That’s why it’s important to respect our customers by protecting residual values. Work has been ongoing with our Italian colleagues to ensure additional supply of cars, which has been achieved, without affecting either residuals or existing dealer orders. Discussions have also been underway with the whole-life-cost companies and the residual value setters, which have confirmed that such a relationship is strong for both brands and will not affect residual values in any negative sense.”