Nissan dealers get stair-step relief

Nissan's Fred Diaz, right, greets Matthew Hoffman, vice president, Hoffman Auto Group, a multi-franchise group in Connecticut, moments before the Nissan make meeting Saturday.

Photo credit: JOE WILSSENS
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NEW ORLEANS -- Nissan has modified its brand-new stair-step sales incentive plan to cut dealers in some markets some slack.

Nissan launched its Dealer Growth Program on Jan. 1, a detailed sales incentive plan that the factory and its retailers spent more than a year hammering out together. The program will be rolling out through early April.

But the plan has received some last-minute tweaks to avoid holding dealers in Nissan's more challenging markets, such as the Midwest, to the same performance yardstick as those in Nissan's most successful markets, such as Texas and New York, said Fred Diaz, Nissan senior vice president for U.S. sales, marketing, parts and service.

"We're going to do it state-by-state," said Diaz, speaking outside the Nissan make meeting on Saturday, where retailers asked questions about the program. "Some markets are not as far along as some of our others."

Nissan has a publicized goal of obtaining 10 percent of the U.S. auto market by April 2017, up from 7.3 percent at the end of 2013. The automaker believes that stair-step programs -- a sometimes controversial industry practice that rewards dealers for meeting aggressive temporary sales targets -- are vital to hitting that market-share target.

But Nissan recognizes that 10 percent needs to be a national U.S. average -- not a goal applied equally in every market, says Brad Fenton, chairman of the Nissan National Dealer Advisory Board and owner of six Nissan stores in Oklahoma and Missouri.

"We need to reach the goal on average," Fenton says. "Everyone is expected to grow individually to contribute to the effort. But the market shares are different all over the country, and so our individual targets will be different."

Like many import brands, Nissan has made deep penetrations in many markets along the perimeter of the country, including Dallas, Southern California and greater New York. But the U.S. map is hardly homogeneous for the brand.

"In my market, we might already be at 10 percent," said Fernando Somoza, co-owner of Central Houston Nissan in Texas. "We might need to go much higher than 10 percent."

You can reach Lindsay Chappell at lchappell@crain.com.


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