Chrysler pulls dealer quotas

Chrysler LLC is scrapping its controversial, quota-based dealer incentive program and instead will pay a cash bonus to retailers every time a vehicle is sold. Chrysler will tell 2,000 of its dealers assembled at a meeting today in Las Vegas that it is ending the Volume Performance Allowance program effective Jan. 1, officials told The Detroit News.

Critics say the program compels dealers to sell products at a loss to earn cash bonuses tied to monthly sales goals set by the automaker. In June, Chrysler dropped VPA targets by 10 percent in response to dealer complaints.

After Jan. 1, the automaker will pay dealers a straight-up bonus — $200 when the dealer invoices a vehicle and $200 when it's sold. Under the VPA program, every month, a Chrysler computer spits out a new target, said Alan Helfman, owner of River Oaks Chrysler Dodge in Houston. At River Oaks, the dealership gets $300 per vehicle for meeting 85 percent of its goal and $500 for meeting its entire goal. In some areas of the country, dealers have reported bonuses of up to $700 per vehicle. Detroit News