Area Chrysler dealers adjust to new bonus plan

10/10/2001

Woodville's Rouen Chrysler Dodge Jeep no longer gets money to fill gas tanks on new cars, sport-utility vehicles, vans, and pickups. To trim costs, DaimlerChrysler AG's financially troubled U.S. side cut that and other dealership payments this year.

But the dealership has more than made up for those losses by exceeding by at least 10 percent the monthly sales goals set by the Chrysler unit.

Instead of getting bonuses based on vehicles ordered as they previously did, Rouen and other dealers get windfalls for meeting or exceeding sales goals with part of the money saved from cutting other payments.

"We've hit every month since it's come out, and we love it," said Mike Rouen, the dealership's president. "It's enough money from it that you're ahead."

Depending on whether the dealers achieve the continually changing goals calculated from last year's sales, Chrysler dealers either love or hate the sales-based bonus plan intended to increase market share, Mr. Rouen and other local dealership officials said.

Yet, as the economy continues to stall and the Sept. 11 terrorist attacks affect spending, even some who have done well with the program said they are apprehensive about meeting upcoming sales objectives.

Some dealers are calling for the program's demise or at least a change so some money is given for each vehicle, dealership officials said.

When the program was begun, dealers meeting 75 percent or less of their sales targets received no money at all, and those at 110 percent or more got the maximum of $500 a vehicle. Dealers who reached 76 to 99 percent of their goals received $150 for every vehicle sold, and those at 100 to 109 percent earned $250.

Customers don't see a difference with the program unless dealers use some of the extra money they know they will get to cinch sales, helping them boost volume and meet or exceed goals, some dealer officials said.

"It really didn't affect the consumer at all unless you want to use it as a deal," said Toledo's Grogan's Towne Chrysler dealer Denny Amrhein. "It's been good to us."

The program changed this month, but how much dealers will get is unclear. Some explained that no bonuses will be given unless they meet the 100 percent mark.

Changes have been made to the program through the year, said automaker spokesman Marc Henretta, who declined to discuss details.

Increased market share, one of the main goals in starting the program, has fallen short. The Chrysler unit's U.S. market share fell to 14.5 percent last year as financial losses mounted. It dropped to 13.4 percent through September, when sales dropped 28 percent from a year ago the same month, according to Autodata Corp., a consulting firm in Woodcliff Lake, N.J.

Although Vin Devers, Inc., has done well with the sales-based bonus program and contends it helps make dealers more aggressive, it may not increase market share, said Howard Henderson, the Sylvania dealership's general sales manager.

"That, we don't know - that hinges on product" and incentives, he said.

One promising addition to Valiton Chrysler, Inc., which has been hitting its monthly sales targets, is a program to issue credit cards to pre-approved Chrysler, Jeep, and Dodge owners this year.

Card holders will earn one point for every dollar charged to the card and bonus points for purchases at dealerships, which can be used for oil changes, Mopar parts, vehicle down payments, and other expenses.

Anything that helps get customers into dealerships will help sales and service departments, said Jeffrey Valiton, the Toledo dealership's general manager. People with similar GM cards are loyal to General Motors Corp., he said.