New Fiat boss plans for greater retailer success
New Fiat Chrysler Automobiles boss Arnaud Leclerc, who has joined FCA from PSA where he ran the DS brand in the UK, is aiming to improve the fortunes of both the retailers and the brands.
In the past five years the FCA brands have been suffering a downward trend in the NFDA Dealer Attitude Survey culminating in the group’s four brands occupying the bottom four places in the survey at the start of this year.
“The NFDA survey goes in the context of 2017. The survey took place in January. Let’s wait to see the next survey,” commented Mr Leclerc.
“We are facing, for many reasons, a confidence problem between the dealer and FCA. My first priority after I arrived in mid-January was to meet the dealers, which I have now done. We need to understand the needs of the dealers and regain their trust. We will never succeed alone. Our first priority is to put the customer back at the centre of our discussions and to make sure that we are working as partners.
“What happened in 2017 was that many changes happened in the market and we were too complex in the way we handled the partnership with the dealers. It’s something we need to change very quickly and I’ve given my personal promise to do this.
“It’s about managing the numbers and how we were behaving. We were behaving as if we already were a 5% market share company.”
In 2017 FCA had a new car market share of 2.5%. “I think we deserve a lot more than 2.5% market share,” he added.
Today FCA has 160 Fiat, 100 Abarth, 60 Alfa and 60 Jeep outlets and of those there are 33 brand centres with all four.
Commenting on the development of the networks, Mr Leclerc said: “There is a wish on our side to go with all FCA brands. And where appropriate that goes for our network. It also fits with our fleet organisation where we go very openly with all brands because they are complementary.
“We have 33 today, and we have the potential to have a maximum of 10 more FCA brand centres. More than that doesn’t fit with our plans.”
However, this isn’t Mr Leclerc’s only plan for the network. “The second proposal with the network is the idea to have Abarth in the Fiat network. Today we have 100 Abarth but 160 Fiat.
“Why are we doing this? It’s not because we think the Fiat customer is the same as the Abarth customer, but because Abarth is a strong success in the UK. We are selling more Abarth in the UK than FCA is selling in Italy. It means that our UK customers are keen on this proposition.
“But still 6,000 units, which is what we sold last year, is not massive and there is an opportunity for our dealers to cover the territory with a car that is not a clash with the classic Fiat 500 – the customers are not the same.
“I think that covering the territory with our Fiat network is the easiest way of getting a return on investment for the dealers. We are not imposing this but we are suggesting it,” added Mr Leclerc.
“We also think there is a route for Alfa dealers to have Jeep and Jeep dealers to take Alfa. This does not only go for the UK.
“With these two brands we are in the premium market with specific standards for the dealers. So we think it fits. I think we have to move to more and more dealers doing this if possible.”
Ultimately it’s profitability that retailers, and FCA, want: “The network profitability is not where we want it to be, but we still have the upper quartile of retailers above 2% return on sales, which is good,” said Mr Leclerc. “What we need to make sure of is that the rest improve their profitability. Volume will help because our profit per unit didn’t move between 2016 and 2017.”
This isn’t going to be an easy task and new product that’s on the horizon can’t come soon enough. For the first quarter of 2018 FCA car sales were running down 30% against the overall market down 12%.