GM offers dealer bonuses to spur Malibu sales
Some see effort as rebooting the rollout
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DETROIT -- General Motors is offering cash bonuses to dealers who hit or exceed sales targets for the 2013 Chevrolet Malibu, an effort to stoke sales of the just-launched sedan. The program also covers the Chevy Cruze.
The so-called stair-step program began Oct. 2 and ends Wednesday, Oct. 31. It gives dealers who exceed a sales bogey set by GM the chance to earn up to $1,000 a car on a portion of their 2013 Malibu and Cruze sales. GM ran a similar program for the Cruze and Malibu in September, the month it launched its high-volume Malibu model.
Stair-step programs award dealers escalating bonuses as they hit factory-set sales targets. Under the current program, dealers who hit 150 percent of their GM-set targets for Malibu and Cruze sales can earn $1,000 per car on half of those sales. Dealers who sell between 100 and 150 percent of their target get smaller bonuses.
GM's program on the Malibu has some dealers scratching their heads. They say it's unusual for GM to run a stair-step program on a freshly redesigned vehicle that is already being plugged in a national marketing campaign.
"I think they're concerned that the car hasn't been getting enough traction on its own," says a Chevrolet dealer in the Southeast.
A GM spokesman declined to comment, saying GM doesn't discuss factory-to-dealer programs.
On Oct. 1, Chevy dealers had a 102-day supply of Malibus and a 51-day supply of Cruzes, according to the Automotive News Data Center.
Through September, Chevy sold 180,600 Cruzes, down 4 percent. In contrast, sales of the Honda Civic rose 40 percent to 234,029, and Honda Motor Co. is working on a freshening of the Civic's much-maligned interior.
Automakers often use stair-steps as an incentive for dealers to clear long-in-the-tooth models to make way for the next-generation vehicle. For example, GM has been running a stair-step program on the 2013 Chevrolet Silverado and GMC Sierra pickups, which will be phased out next year when redesigned trucks arrive as 2014 models.
Many dealers believe GM is trying to reboot the Malibu rollout after stumbling with the spring launch of the 2013 Malibu Eco, a mild hybrid model that stickers for $26,095, including shipping. That's about $3,000 more than the base model car, which arrived in showrooms in September.
For several months, dealers sold heavily discounted 2012 Malibus -- often for less than $20,000, the same price range as the smaller Cruze -- and largely let the 2013 Malibu Eco languish. Now dealers are pivoting to sell the pricier redesigned Malibu, says Sam Pilato, general manager of Dimmitt Chevrolet in Clearwater, Fla.
"The Malibu needs to move up and take the niche as an upscale mid-sized car, which is our busiest segment," Pilato says. "I think some customers are still a bit confused as to where it stands in the lineup."
He figures the stair-step is "a reactionary move because that car probably needs to be relaunched."
Michael McGuire, a Chevy-Cadillac dealer in Newton, N.J., was happy recently to get his first shipment of the base Malibu, the LS, which he says is an easier sell than the Eco.
"That's a lot of car for that money," McGuire says. "If we can't compete with Camry and Accord at that price level, we have no excuses."
You can reach Mike Colias at mcolias@crain.com.
