Chrysler in sales push mode with dealer sops

In efforts add momentum to sales this month, the Chrysler Group, part of Daimler Chrysler, will provide for cash sops on many of its new vehicles plus bonuses of up to $15,000 for sales managers whose dealerships meet or exceed April sales volume targets, said an auto industry report.

As per the incentive plans, sales managers will become eligible for a cash bonus if their dealership reaches 100 percent of its goal for April. The bonuses will be higher if the dealership hits 115 percent of its goal, said the report.

The company has said that the plan has been established under its volume performance allowance (VPA) programme, which already provides incentives close to $500 per vehicle to dealerships that achieve goals. With the new announcement, dealers stand to gain more as April comes to a close.

Meanwhile, sales managers are yet to make up their mind. While some are so happy, others feel that offering bonuses to sales managers could backfire and eat into profits. Analysts say that the plan has all in it to encourage bad behaviour too. There are chances that they would sell vehicles below invoice or give up too much on the trade in. The dealer could end up losing out, they feel.

Many Chrysler dealers were hoping the automaker would do away with the VPA programme altogether because they say it creates an uneven playing field for dealers that can't meet the goals. However, Chrysler has said that it was keeping the VPA programme after reviewing it. It has also informed all Chrysler dealers that cash incentives of $500 would be added on many vehicles including the Chrysler PT Cruiser, PT Cruiser convertible, Pacifica and 300 sedan. The company also added $500 on the Dodge Durango and Jeep Grand Cherokee SRT8, and Jeep Commander and $1000 on the Dakota pickup. This is not all. The company is also offering a $3,000 incentive for Durango lease customers who want to lease another Durango.

But are things rosy on the company front, is what analysts ask now. The new cash incentives on vehicles and the sales manager bonus programme seem to indicate that Chrysler is struggling this month, they said.