VW Group of America contrives new US stair-step program

Article by Christian A., on April 1, 2014

Volkswagen Group of America has formulated a national bonus program that enables dealerships in the United States to recover stair-step incentives jeopardized by this winter’s chilling weather. In order to motivate dealers to recover sales lost in the season, VW will ignore missed January and February sales targets and will pay first-quarter stair-step bonuses according to the number of vehicles they sold in March alone, VW documents show.

Under stair-step program, dealerships would get higher bonuses per vehicle if they reach higher sales targets. VW dubs the program its “Storm Recovery” catch-back. Amy Gushman, VW sales operations manager in Michigan, said in a memo to dealers in early this month that the March is their month to “recover from a very slow start to the year.”

VW is also offering buyers cash and attractive lease and finance rates on vehicles covering 2013-2014 models years. For instance, VW is offering zero percent loans for 72 months on the 2014 Passat and 2014 Jetta. Customers who lease can receive $750 on Passats and Jettas. Ralph Thayer Volkswagen, a dealership in suburban Detroit, sold an average of around 40 new vehicles a month for most of 2013.

It, however, saw its sales dwindle to 16 in January and 18 in February. According to the dealership’s sales manager, Kevin Creech, the store’s 2014 numbers, would allow it to only attain only the first of three tiers of VW’s stair-step bonus program in the first quarter. But with sales of 30 new vehicles through March 28, the dealership is nearing the much higher-paying third tier of incentives. [source: automotive news - sub. required]

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