Ford is offering bonuses to dealers topping sales targets

Article by Christian A., on November 10, 2014

Ford Motor Co. has launched a bonus program that offers its dealers a cash bounty for meeting sales targets. Ford’s Volume Growth Bonus Program offers dealers payments of between $100 and $600 per car sold, covering the C-Max, Fiesta, Focus, Fusion and Escape models, according to a Nov. 1 Ford memo to dealers obtained by Bloomberg News.

The bonus program will have Ford pay dealers more cash per model as soon as they meet sales targets. These bonus payments could prompt dealers to sell their stocks at much lower prices and even offer generous trade-ins – mainly because the cash they could get from the program could be more than enough to cover any deductions.

The program, however, has its cons despite allowing Ford to cut any loss in market share. Aside from being costly, also lower resale values on models sold on discounts. Likewise, such programs could customers who miss out on a generous deal. “It cheapens the product and it’s just a doggone shame,” dealer Jack Kain told Bloomberg.

He noted that since sales figures in October weren’t competitive, Ford had to do “something this drastic to change the picture.” Ford saw its car and truck sales drop 1.8 percent in the United States in October. It also saw its market share for the first 10 months of the year fall to 15.1 percent, from 16 percent in 2013.

Ford’s decline came as the overall US auto market surged 6.1 percent to 1.28 million in October. Ford chief executive Mark Fields is expected a drop in sales and profits this year, as the carmaker revamps two plant to build an aluminum-bodied version of the F-150 pickup.

Ford already commenced output of the new F-150 at a Michigan plant in October, but a full-blast production would not happen until the second quarter of 2015.’s second quarter.The dealer bonus program is not a stair-step incentive, Erich Merkle, Ford’s sales analyst, said in an interview. The bonus program will end on Jan. 2, 2015.

If you liked the article, share on:

Pin It

Comments

Recommended

In a leaked image following a presentation held in China, we learned that Czech automobile manufacturer Skoda will soon unveil 2 more new SUVs in China, resulting in a four-model...
by - March 24, 2017
McLaren is said to be designing the next generation of Sports Series, which could include a V6 hybrid among its powertrain options. It was earlier reported that the British automaker...
by - March 24, 2017
To the proud owners and owner-to-be of the Porsche 991 Carrera GTS, there's good news for you all. German automobile manufacturer Porsche recently confirmed to the public that the Porsche...
by - March 23, 2017
McLaren diehards, this is the moment that you're all waiting for. The British automaker recently publicized the teaser outline of its new automobile that will hit the streets soon, dubbed...
by - March 23, 2017
PSA seems very confident about conquering the world. The purchase of Opel/Vauxhall for €2.2 billion ($2.3B) from General Motors makes PSA the second largest car company, just behind the Volkswagen...
by - March 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries