Digital Dealer - August 2018 - 14

D E A L E R OP S & M ANAGEM ENT: L e g a l & R egul atory

By Richard Sox, Esq.
Partner,
Bass Sox Mercer

BMW and
Mazda Incentive
Program Changes
May Violate
Franchise Laws
Both BMW and Mazda
have announced
changes to their per car
incentive programs. The
changes to the BMW Added
Value Program are effective
January 1, 2019, and the
changes to the Mazda
Brand Experience Program
are effective July 3, 2018.
While the revisions to each
incentive program are
different, they have one
thing in common - they
likely violate franchise laws

14

AUGUST 2018

in many states.
Starting with the BMW
Added Value Program, the
change causing the most
concern among dealers
is a new requirement that
dealers must service a
certain amount of vehicles
registered within their own
assigned market area (PMA)
in order to qualify for AVP
monies. These monies, of
course, amount to hundreds
or thousands of dollars a vehicle. The practical problem

D I G I TA L D E A L E R . C O M

with this new requirement is
that a dealer has little control
over where a BMW customer will obtain service. All
new vehicle dealer franchise
agreements require that the
dealer perform service work
for any customer and, in
turn, the warranty paperwork informs the customer
that they can obtain service
at any BMW store in the
United States. In an area
where there are multiple
BMW dealers and signifi-

cant cross-shopping due to
the relative convenience of
various BMW dealers in a
metropolitan area, marketing efforts employed by a
dealer would likely have
little impact on changing
customers' minds on where
they take their vehicle for
service. Moreover, in many
cases, customers will drop
their vehicles for service at a
dealership near their workplace instead of their home
(where vehicles are registered). In an urban area, it is
likely that a different BMW
dealership is located nearer
to the owner's workplace
than his or her home. Again,
changing this customer behavior would be very difficult.
The revisions to Mazda's
Brand Experience Program
are more extensive than
BMW's changes to the Added Value Program. Mazda
has maintained the general
program structure of a set of
base qualifiers and a second
set of "earning elements."
It is our understanding that
most of the base qualifiers,
items like training and courtesy vehicle program compliance, have not changed but
"facility type" has been given
added importance. The
earning elements have been
revised dramatically. Those
elements are now only
1) the six base qualifiers,
plus a dedicated general
manager if a Retail Evolution
facility (but the monies are
paid at different rates based
on a dealer's facility type);
and 2) customer satisfaction.
Removed from the earning
elements are sales and
service requirements.
Importantly, the amount of



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Table of Contents for the Digital Edition of Digital Dealer - August 2018

Digital Dealer - August 2018
Contents
Message from the Show Director
How to Spot Potential Leaders in Your Organization
Bridge the Gap Between Where You Are and Where You Want to Be
Are You Organized for Success?
BMW and Mazda Incentive Program Changes May Violate Franchise Laws
Accountability: The Centerpiece of Success in Fixed Ops
14 Ways to Recruit Technicians
Disciplined Innovation
What the Companies With the Worst Reputations All Have in Common
The CRM of Tomorrow, Today
Interview With Phil Mitchell of Sunset Auto Family
2 Messages From Dissatisfied Customers
Why Reviews from the Decision-Maker Matter
The 3 Essential Traits of High-Profit F&I Managers
Price Is the Easiest Part of My Job
Phone Power!
8 Tactics to Help You Stand out on Social Media
5 Signs It’s Time to Part Ways With Your Conversion Tools
Direct Response: Now More Than Ever
Digital Dealer - August 2018 - Digital Dealer - August 2018
Digital Dealer - August 2018 - Cover2
Digital Dealer - August 2018 - 1
Digital Dealer - August 2018 - Contents
Digital Dealer - August 2018 - 3
Digital Dealer - August 2018 - Message from the Show Director
Digital Dealer - August 2018 - 5
Digital Dealer - August 2018 - How to Spot Potential Leaders in Your Organization
Digital Dealer - August 2018 - 7
Digital Dealer - August 2018 - Bridge the Gap Between Where You Are and Where You Want to Be
Digital Dealer - August 2018 - 9
Digital Dealer - August 2018 - 10
Digital Dealer - August 2018 - 11
Digital Dealer - August 2018 - Are You Organized for Success?
Digital Dealer - August 2018 - 13
Digital Dealer - August 2018 - BMW and Mazda Incentive Program Changes May Violate Franchise Laws
Digital Dealer - August 2018 - 15
Digital Dealer - August 2018 - Accountability: The Centerpiece of Success in Fixed Ops
Digital Dealer - August 2018 - 17
Digital Dealer - August 2018 - 14 Ways to Recruit Technicians
Digital Dealer - August 2018 - 19
Digital Dealer - August 2018 - Disciplined Innovation
Digital Dealer - August 2018 - 21
Digital Dealer - August 2018 - What the Companies With the Worst Reputations All Have in Common
Digital Dealer - August 2018 - 23
Digital Dealer - August 2018 - The CRM of Tomorrow, Today
Digital Dealer - August 2018 - 25
Digital Dealer - August 2018 - Interview With Phil Mitchell of Sunset Auto Family
Digital Dealer - August 2018 - 27
Digital Dealer - August 2018 - 28
Digital Dealer - August 2018 - 29
Digital Dealer - August 2018 - 30
Digital Dealer - August 2018 - 31
Digital Dealer - August 2018 - 2 Messages From Dissatisfied Customers
Digital Dealer - August 2018 - 33
Digital Dealer - August 2018 - Why Reviews from the Decision-Maker Matter
Digital Dealer - August 2018 - 35
Digital Dealer - August 2018 - The 3 Essential Traits of High-Profit F&I Managers
Digital Dealer - August 2018 - 37
Digital Dealer - August 2018 - Price Is the Easiest Part of My Job
Digital Dealer - August 2018 - 39
Digital Dealer - August 2018 - Phone Power!
Digital Dealer - August 2018 - 41
Digital Dealer - August 2018 - 8 Tactics to Help You Stand out on Social Media
Digital Dealer - August 2018 - 43
Digital Dealer - August 2018 - 5 Signs It’s Time to Part Ways With Your Conversion Tools
Digital Dealer - August 2018 - 45
Digital Dealer - August 2018 - Direct Response: Now More Than Ever
Digital Dealer - August 2018 - 47
Digital Dealer - August 2018 - 48
Digital Dealer - August 2018 - Cover3
Digital Dealer - August 2018 - Cover4
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