Andrew Humberstone.

Having just swallowed the ailing US auto giant, Chrysler, it’s a sign of the times that Fiat is keen to trumpet the news that its UK company is set to end 20 years of losses!

Fiat UK will break even or make a small profit this year after 20 years of million-pound losses, said managing director Andrew Humberstone, 45, who took over at the company 20 months ago.

Losses amounting to £60 million a year were caused by an obsession with market share. ‘It was totally illogical, madness,’ he told ModernSelling.com.

New business model

He admitted that his new business model – pulling out of rental and fleet deals – was bold and high-risk but it's working because ‘we're in the right place at the right time with the right products’.

One focus has been on cutting inventory: a clean sweep of the Fiat business has seen the stockpile of 17,000 Fiat-owned used cars, valued at some £100 million, reduced to just 1,900 today.

Retail

Business is now 95% retail with market share growing. ‘I've targeted 5% and I'm quietly optimistic that we'll get there,’ Humberstone said, adding that Fiat's share of the A segment so far this year is up 28% over last year thanks to the success of 500 and Panda. Market share is around 3.5% currently.

Fiat 500

Humberstone took up his role as managing director of Fiat Group Automobiles UK Ltd on 1 November 2007, just as the company was making final preparations to launch the Fiat 500 here. Now, almost two years on, he has been over-seeing the launch of the 500C.

However, he was less critical of Fiat’s performance at the time he took over. At the time, he was quoted as saying in the company’s official press release: ‘I’m looking forward to the challenges ahead for us in the UK. The company has been left in an excellent condition as I take over, and I am determined to carry on the good work that has already been done.’

Sales figures

Humberstone replaced outgoing MD Giulio Salomone, who spent two-and-a-half years in charge. During Salomone’s tenure, sales figures climbed rapidly – up 64% year-on-year to 58,831 units in 2006; making Fiat Group Automobiles UK Ltd the ‘fastest-growing automotive brand in the UK’ at the time. But sales aren’t everything, of course.

Humberstone brought with him a high level of commercial experience in addition to business development management, gained across the globe. His knowledge and understanding of drawing up and implementing top-level business strategies put him in an ideal position to turn around Fiat’s UK operation.

International career

Prior to heading up Fiat UK, Humberstone was chief representative for Fiat Group Automobiles China and vice-chairman of Nanjing Fiat. Before that he worked in various capacities in India, United Arab Emirates, Saudi Arabia, Kuwait and South Africa.

Scrappage scheme

Speaking at this month’s media launch of the Fiat 500C, Humberstone was also critical of the UK scrappage scheme and chastised all European governments with similar schemes for not having an exit strategy. ‘What will happen when the schemes end? I think markets will go very, very quiet for a month or two before genuine retail buyers start to return,’ he said.

He also pointed out that Fiat has never had to discount the price of the 500 and he is now being forced to do that by the UK's scrappage policy.

New 500C: advance orders.

He added that 17% of customers buying a new Fiat under the scheme were scrapping a Ford and 13% another Fiat.

Dealer network

Part of his ‘clean sweep' strategy was to shake-up the dealer network: 31 have left the franchise, 28 new dealers have been appointed and 12 more are about to join the network which is currently 160-strong and will grow to 200 as the Fiat brand develops.

‘Dealers have to become true partners in our business and have common standards,’ he said. Dealer profitability has grown from 0.9% return on sales last year to 1.4% this year.

500C sales

The Fiat 500 C went on sale this month ( 2 July). Advance orders already top 700 and the UK's total allocation for the year will be around 1,500, rising to around 2,500 next year. Prices start at £11,300 for the 1.2 Pop rising to £14,100 for the 1.3 Lounge.

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