Blog: Dave LeggettPSA-Fiat vans

Dave Leggett | 8 November 2006

The PSA-Fiat Sevelnord vans launched at the Valenciennes plant this week looked pretty good, as far as vans do. Messrs Folz (PSA) and Marchionne (Fiat) seemed pleased with themselves, as did a local politician who joined the love-fest. There was what looked like a genuinely heartfelt tribute to the outgoing Folz from Marchionne and they did a kind of double-act during the press conference, contrasting styles working well. Folz is the consumate, capable businessman; a product of French business meritocracy. He'd make a good politician.

Marchionne is also impressive but with a much more laid back style, an impression reinforced by his Canadian accent and relaxed demeanor. He was refreshingly honest when quizzed about what's going wrong with Fiat in China (Fiat's partner in China is Nanjing Auto, but sales of locally made Palio are dismal). No fudging - he effectively held his hands up, admitted that it's a mess and that Fiat is trying to address the problems going forward.

With respect to the vans, the volume targets for the new range looked very ambitious - the partners are shooting for 40% more volume than on the outgoing generation. One way to help achieve that is with more variants. The combi-van made at Sevelnord is a 9-seater and may well find a new market niche.

There was much chatter between journos on the hidden profitability of LCVs in Europe, with the word 'cartel' mentioned once or twice. GM is apparently upsetting the applecart a little with big fleet discounts on vans this year, but the impression given is not of a market segment riven with great competition. One thing that Marchionne did confirm is the importance of LCVs to Fiat Auto profitability. Yes, the LCVs Fiat sells count in Fiat Auto figures, he confirmed. And while he would not talk about operating margins on vans, he did say that vans are the most profitable part of Fiat Auto's operations. Not glamorous perhaps, but important.

Vans as unsung heroes. Now there's a thought. Several players quite keen to continue to enjoy good margins on vans. Conditions for oligopoly? Informal understandings... 

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