VW aids dealers with winter stair-step bonuses

Photo credit: BLOOMBERG

Volkswagen Group of America has devised a national bonus program that allows dealerships to recoup stair-step bonuses threatened during this winter’s miserable weather.

To motivate dealers to recover sales lost this winter, VW will overlook missed January and February sales targets and pay first-quarter stair-step bonuses based on how many vehicles dealerships sell in March alone, VW documents show. Under stair-step plans, dealerships receive higher bonuses per vehicle when they reach higher sales targets.

VW is calling the program its “Storm Recovery” catch-back. “March is our month to recover from a very slow start to the year,” Amy Gushman, VW sales operations manager in Michigan, said in a memo to dealers in early March.

For auto shoppers, VW is offering customer cash and attractive lease and finance rates on 2014- and 2013-model vehicles.

For example, VW is offering 0 percent loans for 72 months on 2014 Passat and Jetta sedans. Buyers who lease can get $750 cash on Passats and $750 on Jettas.

A VW spokeswoman declined to discuss the program.

Ralph Thayer Volkswagen averaged about 40 new-vehicle sales per month for most of 2013. But the dealership in suburban Detroit sold only 16 in January and 18 in February, said Sales Manager Kevin Creech.

With those 2014 numbers, the store was looking to attain only the first of three tiers of VW’s stair-step bonus program in the first quarter, Creech said.

But Ralph Thayer Volkswagen is in striking distance of the much higher-paying third tier of incentives with 30 new vehicles sold this month through March 28. He declined to say what his target is to attain the third tier.

If he can achieve his third-tier goal for March, he said he stands to receive at least $10,000 for each month of the quarter.

That money had appeared out of reach until VW launched the catch-back program, he said.

The program, combined with generous customer incentives, has reinvigorated a store sales force that Creech plans to reward with prizes, including dinner certificates and sports tickets, if the store can get to the third-tier goal.

The program, he said, “has given us a little jump-start.”

You can reach David Barkholz at dbarkholz@crain.com -- Follow David on Twitter: @barkholzatan

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