Fiat needs to improve the profit opportunities for its dealer network, to which it has previously overpromised and underdelivered, according to the brand’s new UK boss.
Kris Cholmondeley took over as managing director for Fiat and Abarth in November last year, alongside his existing role as UK MD for Jeep, which he has held since 2023.
He spoke to Automotive Management at the UK media launch of the Grande Panda (pictured) – one of two important new models for Fiat this year, alongside the 500 Hybrid, which he believes will help dealers by giving them an improved product line-up to offer customers.
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Cholmondeley said: “The network have been through a tough couple of years. And the reality is that we haven’t given them the tools to have as profitable an output as I would have liked, and as I think they have got the right to demand.”
Cholmondeley explained that his philosophy for success was “70% product, 20% dealer network, 10% head office”, which he said he had picked up from a former boss at Peugeot earlier in his career.
He said: “The network are twice as important as us. If I don’t deliver a viable, profitable franchise opportunity, I’ve got no right to retain the right number and quality of retail partners.
“One of my early priorities in this new role is to significantly increase the Fiat network’s profitability, and then that will translate into an improved customer experience.
“It’s not as though they’re given a bad one at the moment, but in terms of medium-term viability, if you’ve got a profitable network, there’s a correlation between the partners and staff you attract and the sales experience.”
Focus on dealer profit opportunity
Cholmondeley explained that the aim of his business plan with Fiat was to deliver a viable profit opportunity for each dealer, in terms of both the size of the network and volume throughput.
He said: “Last year, they didn’t get enough profit. That was related to overheads, but fundamentally it’s linked to volume. So, this year, the average volume throughput for the Fiat network will more than double. And then in 2027, it will double again.
“I’ve talked very openly with the network about this. But the key thing is I know where we are, I know where we’ll be this year, and I know where we are going. And it’s all with network profit in mind.
“I put myself in their shoes. I don’t just worry about me and hope they come along with me. Because that’s not the way the world works, right? They’re in business to make money.”
Cholmondeley argued that Fiat dealers could have confidence in his ability to deliver increased profits for them, based on his having done this with Jeep.
He said: “It’s not as though I’m a new, unproven MD who is just giving words. There’s been substance behind my words, in evidence, in what I’ve done with Jeep over the last two-and-a-half years.
“Some of our partners have a Jeep franchise, some don’t, but word gets around. So, the trust in the direction that we’re going now as a partnership is being rebuilt and put on firmer foundations.
“But I would say, in the network today, we’re not the finished article. There’s lots of things I can still do to improve, things that we will continue to improve on. So, there’s no complacency.”
Chomlondeley said measures he had taken to help dealers included reducing the number of demonstrators they were required to take on relative to volume. He said this was part of a drive to empower dealers locally, and build trust.
He said: “We’ve had, not a deliberate or malicious history, but we’ve had a history where we’ve overpromised and underdelivered. So, that’s been a fundamental correction, where everything I’ve said we will do, we do, and on time. And in most cases, we’ve done it earlier than we said we would.”
Cholmondeley confident in maintaining dealer network size
Like all established brands, Fiat is facing a challenge from the rapid influx of Chinese brands into the UK car market. Automotive Management asked Cholmondeley if he was confident of avoiding repeats of the scenario seen at Vospers in Exeter, which recently decided to stop selling Fiat, Abarth, Jeep and Alfa Romeo cars and instead expand its Omoda, Jaecoo and MG operations.
He said: “There is a finite amount of showroom space in the UK. There is a big influx of extra competition. So, every brand’s retail space is under threat. Fact.
“Am I confident that I can protect our share in space? Yes. Am I complacent about it? No. Does it actually change my strategy and values? No, because they were like that before that threat, it’s not a response to the threat.
“I’m very much aware of the threat, and the extra choices, should we say, our retail partners have. So, we’ve got to earn the right to keep their loyalty.
“I think we bring a lot of stability, a known entity. The retail partners that have stuck with us have been through two hard years – they’re just about to have their feast, really. So, as long as I continue to rebuild the trust, grow profit, deliver on the project plan we’ve got – I don’t think it will be an easy road, but I think we’ll be OK.”
When asked if he was therefore not expecting a significant reduction in the Fiat dealer network size this year, Cholmondeley added: “There is a threat of that, as there is with all brands, but no, I believe in our ability with the relationships that we have, and the product and brand offensive we have, to hold our network still. Will we lose some? Yes. Will we gain some? Yes.
“I’m looking at all avenues and agility in terms of attracting new partners, and reducing the threat of some partners considering leaving.”
Eurig Druce, Cholmondeley’s boss as group managing director for Stellantis UK, told Automotive Management in January this year that with the arrival of the Grande Panda and the 500 Hybrid he thought Fiat should be able to grow its UK market share to 1.5% in late 2026.
When asked if he was confident of achieving this, Cholmondeley said: “By the end of this year, we should be heading very close in that direction, and then the ambition is that we go beyond that in 2027.
“I wrote the business plan, and Eurig’s obviously given his input. So, we’re aligned on that.”