DETROIT -- With General Motors' sales sagging 2 percent in January and February, many GM dealers are at risk of missing a lucrative incentive that pays them a cash bonus if their quarterly sales rise from a year earlier. Some dealers are counting on a big March to hit that bogey.
The sales staff at Hare Chevrolet outside Indianapolis sold 259 new Chevys in the past two months, 17 units behind last year's pace, dealer Courtney Cole says. At stake is a $90,000 payment if the store can beat last year's first-quarter total.
"This is the first quarter in a while where people are really going to have to bear down" to hit GM's Standards for Excellence program, which requires dealers who enroll to sell at least one unit more than they did during the year-earlier quarter, Cole says. Dealers also must meet certain customer-satisfaction scores.
Contrary to a 14 percent rise in industrywide sales over the first two months, GM's sales dipped. The main reason: a tough comparison to the same period in 2011, when the automaker juiced sales through a lease deal that allowed GM customers to waive their last three or four monthly payments if they bought or leased new vehicles.
Huge lease numbers from a year ago have proved tough to overcome. At Hare, for example, the sales staff closed 19 leases last month vs. 55 in February 2011, Cole says.
GM anticipated the tough comparisons. It is offering half the quarterly Standards for Excellence cash to dealers who miss their year-ago levels but beat their region's sales performance, according to a January memo sent to all enrolled dealers.
Cadillac and Buick-GMC dealers will have an especially tough time hitting their sales targets. While Chevrolet sales rose 3 percent in January and February vs. a year earlier, Cadillac sales slid 28 percent, Buick sales fell 17 percent and GMC sales dipped 4 percent.
Thomas Wagar, dealer principal of a Buick-GMC store in northern Michigan, says he needs "a really big March" to beat first-quarter sales from last year. Wagar, whose store sold about 175 new vehicles in all of 2011, would make about $7,500 if he meets his quarterly target.
"Those are big numbers that they want us to reach," he says. "I don't expect to hit them."
Cole is more confident thanks to a "huge start" to March. She says: "We think this could be one of our biggest months in a long time."