Fiat is working on gaining an extra 18,000 sales next year as a result of its deal with BSM to provide the driving school with 500 city cars.

The brand, which took over from Vauxhall as sole supplier in the summer is supplying 14,000 vehicles over the next four years at a rate of around 3,500 a year.

There has been rumour and speculation in the industry over the terms of the deal, but Fiat Group managing director Andrew Humberstone said: “This is one of the best deals we have ever done.

"I can say, hand-on-heart, that we sold the cars to BSM at retail margin levels.

“The way we see it, we are going to be getting 180,000 test drives a year from learner drivers.”

While BSM figures claim a 70% conversion rate – people buying the car, either new or used, that they passed their test in – Fiat is working on just a 10% rate.

This will still give 18,000 extra sales a year.

Humberstone added: “All of the cars are on buy-back deals with us to protect residuals.

"There are only going to be around 4,000 a year coming back – it’s not a huge number.

" I spoke with the pricing guides before signing the deal to see if they thought it would impact on residuals, and they said it wouldn’t.”

The BSM deal signifies a change of tack for Fiat in the fleet arena, cutting back from low profit short-cycle business.

Humberstone added: “If we enter into fleet markets it will be without doing silly business – we will not be buying market share.

“It is about being a focused and profitable business.”