Nissan has a better sales month, but is it playing fairly?

Yesterday, Nissan announced that October sales declined 2.2% to 113,520 vehicles.Thus, Nissan looks pretty good -- or at least less bad than its competition as most saw sales decline more significantly. 

Behind Nissan’s result, though, is a controversial and aggressive dealer-incentive program, one that it rarely discusses publicly: giving big, retroactive bonuses to dealers who hit certain monthly sales targets. Some dealers love the way the incentives reward them for helping the manufacturer compete. “Capitalism at its best,” said Scott Smith, who owns three Nissan dealerships in the Atlanta area. He gets as much as $1 million a year per store and reinvests about a third of it in his facilities and operations. “I wish I had it at every other franchise.”

However, the biggest new-car dealer in the U.S. disagrees. Nissan’s program is arbitrary, and the sales targets are inconsistent among dealers, says Mike Jackson, chief executive officer of AutoNation Inc. This in turn reinforces habits of car-buying that many in the industry have come to loathe, such as aggressive haggling and last-minute gamesmanship. “It’s a discriminatory, multi-tier pricing system that creates winners and losers among customers and retailers,” Jackson said last week in an interview. “The manufacturer is giving the perception that something’s available to everyone, but it’s not really." At the moment, Nissan’s sizable incentives to dealers for hitting targets -- as much as $2,000 a sale, according to Jackson -- make it an outlier. And no other manufacturer is currently doing it.  So is Nissan propping up sales via an unfair bonus program?