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Fiat worried about scrappage scheme

publication date: Jun 27, 2009
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author/source: Robin Roberts
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Four months waiting list makes nonesense of scrappage scheme

The UK Government scrappage incentive  which has netted Fiat about 7,400 extra sales should not be extended despite the additional registrations it has brought, says Fiat UK managing director Andrew Humberstone

"We had great reservations about taking part in it because of the low profit margins for us and dealers on cars which we were not discounting in any way," said Mr Humberstone (below) as he unveiled the new soft-top 500C which goes on sale 2 July alongside the hugely successful Fiat 500 and Abarth 500.

"Since I took over the network 20 months ago we have put a new business model in place which has created demand for our products, improved the return on investment for ourselves and dealers and which is delivering great value to our customers.

"We did not have huge stocks of unsold cars in compounds when the scrappage scheme was discussed and we were not discounting our newest models because customer demand was strong but then we were told all our models would have to be on the scheme if we wanted to join and that was a dilemma for us."		Andrew Humberstone of Fiat UK
As it has turned out, the Panda is the most popular Fiat model to buy in the part exchange scrappage scheme with 41pc of sales taken up, while the 500 accounts for 35pc and the Grande Punto approximately 17pc.

With strong demand in the UK it means some of the more popular models will have to be restricted by Fiat because it is making less money on them than those sold under the various scrappage schemes in the Euro-zone.

"I hope the scheme is not extended in the UK when it is due to expire because we and the dealers have to give more than the Government is contributing and they make it up in VAT, car tax, and insurance tax when the new models are registered but the dealers and ourselves are being tightly squeezed.

"It was intended to clear out unsold stock, which we did not have, and any continuation of it after the planned cut off next March would simply move to creating new model demand and all the problems that would bring in terms of pricing, competition and supply. You have to question the economics of it. "

The new Fiat 500C (top) was unveiled at the Geneva motor show in March and the UK is the first market to get it, two days before it hits Italian showrooms, There is a four month waiting list for the car and Fiat anticipate selling 1,500 this year and over 2,500 next year.

It has a powered roof and comes with a choice of 69bhp 1.2 and 100bhp 1.4 petrol engines as well as 75bhp 1.3 MultiJet turbodiesel, five and six speed manual boxes or a semi-automatic sequential transmission with 1.4 engines only. There are black, red and ivory choices to the soft top while the car comes in Pop version from £11,300 or Lounge at £12,700, approximately £3,000 more than their saloon equivalents.

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