DETROIT -- General Motors is offering Chevrolet dealerships bonuses of as much as $300,000 per quarter, extending a strategy already in use at other GM divisions.
Dealerships must hit sales and customer satisfaction targets to receive the bonuses under the Standards for Excellence program. Payouts will start at $12,500 and top out at $300,000 per quarter.
Cadillac started the program 10 years ago to motivate dealers. GM offered the program to Buick and Pontiac dealers this year.
Chevrolet needs a program like this to help move the onslaught of new products, says Jim Campbell, marketing director for Chevrolet cars. Chevrolet is launching 10 vehicles in 20 months as it pursues 3 million annual U.S. sales by 2005. The division sold 2,642,583 vehicles in 2003.
Dealers pay a $40,000 sign-up fee for the first portion of the bonus program, which started July 1 and runs through the end of 2005. The annual fee after that will be $30,000.
Smaller dealers won't pay a lower enrollment fee, even though they will earn smaller bonuses. This has some dealers griping, according to dealer council chairman Tommy Brasher of Brasher Motor Co. in Weimar, Texas.
But dealers need to look at it as a way to improve their businesses, Brasher says.
"If you take the suggestions and recommendations, there is a good chance you'll be selling more cars and satisfying more customers," Brasher says.
To qualify for bonuses, dealerships must sell 5 percent more units than they did in the same period of the previous year. Bonuses will be paid quarterly. If dealers don't qualify one quarter, they are still eligible for the next one.
Customer satisfaction scores will be an average of purchase satisfaction and service satisfaction. All dealerships must hit the minimum average to qualify. If a dealer hits his customer satisfaction target but is below the sales minimum, that dealer does not qualify for a bonus for that period.
In 2005, Chevrolet will add a training requirement. To meet this target, a minimum number of salespeople must attend training sessions.
Says Brasher: "This will not only help Chevrolet get to 3 million in sales, but it will improve the operation of the 4,200 Chevrolet stores."