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Manufacturer Bonuses Can Make Smart Managers Do Strange Things

Manufacturer incentives can turn an unattractive vehicle deal into a rational one. They can also turn a rational management team into a group that starts counting money before it has actually been earned. Volume bonuses, stair-step programs, campaign support, holdback and other manufacturer income are legitimate parts of dealership economics. The danger begins when management attributes too much of that income to the individual deal in front of them. Not all incentive income is incremental...