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Old 09-24-2012, 02:29 PM   #1
XDCX
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Default Lincoln to eliminate Dealer Holdback

Automotive News is reporting that Lincoln has informed their dealers that they plan to eliminate the automatic 2% Holdback payment which has been a standard practice for the franchise several decades. A Ford official indicated they made the decision in part because other luxury OEMs like Audi and BMW do not pay their dealers holdback.

Ford added that Lincoln dealers will have an opportunity to earn additional Dealer Cash payments if they meet a variety of available programs. To me, the programs appeared to be needlessly complex. (Does Ford really need four Dealer Cash programs for their dealers?)

Here's a recap of the Dealer Cash programs available for Lincoln dealers:
Lincoln Commitment Program - Phase 1: Pays 2.75% of Invoice for Lincoln dealers who meet signage, training and customer initiative requirements - e.g. washing customer service cars.

Lincoln Commitment Program - Phase 2: Pays an additional 1% of Invoice for Lincoln dealers who meet additional training requirements and manage to provide 70+% of their Internet Leads with a quality response within 12 hours.

Lincoln CPOV Incentive - Pays 2% of all new Lincolns Invoiced per quarter if a dealer meets Lincoln's CPOV sales target.

Lincoln CPOV Incentive - Pays a flat fee for each CPOV vehicle based on some other (not reported) criteria.
Could the news be any worse for a Lincoln dealer? Yep, Lincoln's going to raise the Invoice price of their vehicles 1% to pay for their new programs but MSRP pricing will remain the same. There goes another percent of the ever shrinking Dealer Margin.

Ford indicated they've been working with their Dealer Council concerning these changes. Seems hard for me to believe that any Dealer Council representative would think these changes are good for the Lincoln brand or the franchise.
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