VW shifts bonus and loaner programs
Ellis wants a simpler program.
Volkswagen of America has changed the way it calculates dealer bonuses and also has made an in-store fleet of loaner cars a requirement for a payout.
Since Jan. 1, performance-based bonuses are being calculated using customer satisfaction scores and other factors, says Jimmy Ellis, the incoming chairman of the Volkswagen National Dealer Advisory Council.
Ellis, who runs two VW stores as COO of Jim Ellis Automotive Dealerships in Atlanta, says the brand's dealers seem to be benefiting from the performance bonus program as a whole. Their stores are profitable, with a 2.5 percent return on sales in 2012 -- "a good, solid number," Ellis says.
But he still worries that the bonus program is becoming too complicated. Dealer council members worked with VW executives at the end of 2012 and amended the formula, which will remain in place throughout 2013.
Still, Ellis says, "I would like to see them have a more simplistic program."
To qualify for performance bonuses, VW dealers now must have their own fleet of VW-brand loaner cars. Dealers previously have had the option of paying for customers' rental cars and getting reimbursed by VW.
Ellis says some dealers already had their own fleets of loaner cars. Some of the dealers who did not felt "pushed" into doing so by the new requirement, he says.
They may change their minds, Ellis says, because VW is putting more resources into the program in an effort to keep customers happy.
"After we experience the program for the first few months," he says, "I think dealers will see that it does have more value in it, although it does have more teeth."
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