Business

FCA to launch subscription car service in Brazil in January

FCA will first launch a pilot in mid-January at 32 dealerships in its network of more than 700 points of sale in Brazil

Photo: REUTERS/Rebecca Cook
  • The new company will operate only with vehicles of the Italian-American group;
  • The pilot will serve for the company to estimate the size of the demand for the service.

The FCA group, owner of Fiat and Jeep brands, announced on Friday the launch of a vehicle subscription company in Brazil, in a strategy to capture customers who are no longer consumers of cars, but who with the pandemic may be considering private transportation rather than public.

Flua!, which has the potential to compete with groups already established in the market such as Localiza and Unidas, which recently launched vehicle subscription services, marks the first time that the FCA group enters this segment worldwide.

FCA will first launch a pilot in mid-January at 32 dealerships in its network of more than 700 points of sale in Brazil. The stores chosen are in the states of São Paulo and Paraná. The new company will operate only with vehicles of the Italian-American group and the pilot will serve for the company to estimate the size of the demand for the service.

The group did not report investments in the undertaking. The director of Flua!, Fábio Siracusa, said in an online conference with journalists that the potential audience is “large and growing”, but did not give details or estimate of prices of the service.

According to him, the new company will act in partnership with the concessionaires and with the Fidis bank, also from FCA. The concessionaires that join it will have, in addition to participation in the subscription fees paid by customers, income with maintenance services for Flua! vehicles. Once the customer’s contract expires, the vehicle can be purchased by him or returned to the dealer for resale, he said.

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“We have high expectations about the potential (of Flua!). That is why we are launching in Brazil, we are going to learn from the pilot,” said Siracusa.

Asked if the new company could create problems in the relationship of the automotive group with the car rental companies, major customers of the automakers in the country, Siracusa said that he does not expect “any kind of problem” because the companies “work with short-term leasing and operate with fleet management for companies. This subscription car product is outside this scope.”

The executive stated that Flua!’s service cars! they will not remain in the dealers’ inventory, so they will not generate financial costs for them. The company will contract the production of the vehicle signed by the customer directly with the factory, which will guarantee spaces on the assembly line for Flua! cars.

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The contracts to be offered by the company will be for 12, 24, or 36 months, with deductibles of 1 thousand, 2 thousand, or 3 thousand kilometers to run per month. “The product was designed to meet the profiles of customers who are no longer attached to the car and no longer visited our showrooms. It is designed to bring new customers to showrooms,” said the executive, adding that FCA “did not spare investment in this product.”

(Translated by LABS)

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