Dealers say retroactive incentives that reward those who meet the biggest sales goals are unfair to dealers in smaller markets or those where certain models aren't popular.
6:21PM EDT October 23. 2012 - Auto dealers want automakers to halt "quota-based" incentives like those that helped Chevrolet Volt set a sales record in August.
"Manufacturer intrusion into dealers' business," griped Bill Underriner, chairman of the National Automobile Dealers Association at speech in Detroit today.
The way those incentives work:
- Automakers assign sales goals for specific models to dealerships.
- If dealers hit the goals, they get a fat rebate for every vehicle sold, retroactive to a time the automakers assign.
- Smaller rebates are paid as dealers hit milestones en route to the big quota number.
Chevy dealers were able to get as much as $2,500 per Volt sold, all the way back to May, if they hit a quota in August.
The spread of such ghost give-backs is detailed in the new book Letting the Cat Out of the Bag by James Bragg, founder of Fighting Chance, which helps car buyers get discounts.
Bragg points out that a dealer who is, say, one car short of hitting a high-paying goal could afford to give away a car to reach the high-paying incentive quota. But it's all but impossible to know how close an individual dealer is to the goal, Bragg notes.
Underriner, a Buick, Honda, Hyundai, Volvo dealer in billings, Mont., says such incentives are unfair to dealers in markets where certain models aren't popular, or who don't have big urban sales areas to draw on for buyers.
