GM Dealers Increasingly Worried Recalls Will Affect Their Quarterly Bonuses

Published: Jun 3, 2014
General Motors
General Motors has had a record number of safety recalls this year, which is making their franchised dealers increasingly worried that this might hurt their quarterly incentive bonuses.

GM has told its dealers to stop the deliveries of some high-volume models of vehicles, which is hurting sales, because customers can’t get the car straight away or can’t even test drive it. A few “delayed or lost sales can cost dealers tens of thousands of dollars in factory incentives if the retailers fall short of their sales targets.”

Such an issue already occurred at a dealership near Washington D.C. which lost around 15 sales in May, because of the stop-sales. Customers, especially in areas which offer many options, are often unwilling to wait and simply opt for another car brand.

GM dealers are eligible for a bonus if they manage to sell at least one more vehicle than did in that quarter a year ago, but also achieve a predetermined customer satisfaction rating.

Read the full article in Automotive News.

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Victor Lance is the founder and president of Lance Surety Bond Associates, Inc. He began his career as an officer in the U.S. Marine Corps, serving two combat tours. As president of Lance Surety, he now focuses on educating and assisting small businesses throughout the country with various license and bond requirements. Victor graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan's Ross School of Business.