Fiat Chrysler has shifted a dealer incentive program meant to drive sales of the Chrysler 200 to the Jeep Cherokee, Automotive News reports. The incentive, which is part of FCA’s Volume Growth Program (VGP), ran for more than a year and encouraged dealers to push sales of the 200 in order to reap a monthly reward.
In order for a dealer to receive payment under the VGP incentive program, they must reach a monthly volume target set by FCA. Once the minimum is reached the amount they receive on a by-car basis increases, pushing them to sell more and more 200s. This pushed some dealers to buy 200s themselves in order to reach their VGP targets – as many times larger dealers would have $100,000 or more in incentives on the line.
On paper, it seems to have worked. Sales of the 200, which occupies the slow-selling mid-size sedan segment, were up 67 percent through to November of this year, according to AN. However the departure of the incentive program has come at a bad time, with 200 sales down 28 percent in November and a 98-day supply of the sedan currently sitting on Chrysler lots.
Chrysler dealers are also offering the brand-new 200s they bought in order reach their VGP incentives for sale on websites like Autotrader.com at a discount, AN says. This gives customers a cheaper option when buying a new 200, however the amount of 200s being sold this way isn’t enough to negatively affect the model’s residual value, according to Kelly blue Book analyst Karl Brauer.
One dealer told AN that Chrysler’s decision to switch the VGP incentive program over to the Cherokee is “very good news,” as it’s more of a hot-ticket item than the 200 and is easier to sell.