Monthly Order Allowance for Dealers

[GilSchoonover]

The following was just announced by NISSAN today in a Newsletter provided to EV Sales Leaders. I'm fairly certain this does not affect any orders already confirmed. For those of you (including me) with reservations who have been waiting to RAQ (Request A Quote), this policy change could definitely affect you.

If you have any questions, please feel free to PM me or call me.

Nissan LEAF Dealer Monthly Order Allowance – FAQ
In order to allow fair and equitable vehicle availability in each launch state, starting on Thursday, October 21st, 2010, Nissan is applying a monthly order allowance for each dealer in Waves 1 and 1a (CA, AZ, HI, OR, WA, TN, and TX).
Each month, your (dealers') Nissan LEAF Customer Order Management Dashboard will include a static number on it. This number will represent the total number of LEAF customer orders you can process in that month. Once your store has reached its allowance, customers will not be able to send you any more order in that month and will be prompted to contact you directly for more information. The attached FAQ will give you more details regarding the order allowance.

Why is there a monthly order allowance? Why is it being put in place?
The allowance is simply a method to spread each month’s order production over a broader
number of Nissan LEAF dealers. The allowance will allow for equitable distribution of Nissan
LEAF vehicles within each state.

When will the monthly order allowance take affect?
The Monthly Order Allowance will launch on Thursday, October 21st

How often is the monthly order allowance calculated?
For the 2011 Nissan LEAF model year each dealer will receive a new allowance each month
(first week of each month).

How does the allowance work?
As an example, if a dealer has an allowance of 20 in December and reaches that number of
confirmed customer orders (20) within that month, the dealer will not be able to process
any more orders that month.

Scenario: A dealer is working through the RAQ/order process on the site with
Customer 1. While that is happening, the dealer confirms an order with Customer
2 on the site. Customer 2 received the dealer’s last available order based on the
dealer’s monthly order allowance. What happens to Customer 1?
Customers already working with a dealer on an active RAQ will be allowed to process an
order if the dealer has reached their allowance while that RAQ is active. An active RAQ is
defined as any time AFTER the customer submits the RAQ to that dealer. This also includes
if the order is being reworked between dealer and customer. If that RAQ becomes a
confirmed order, it will count against the dealer’s monthly order allowance in the following
month.

During the Request a Quote process how is the customer informed that the dealer
has reached their allowance?
Customers who try to select that dealer during the request a quote process will be informed
on the website that the dealer has reached their monthly order allowance and to contact the
dealer for more information.

Why is the customer told to contact the dealer?
Since the dealer and customer have most likely begun a dialogue, Nissan wants to make
sure the dealer has the opportunity to explain the monthly order process and how they will
serve their customers. Because the allowance is recalculated every month, and if the
customer is willing to wait, the customer could order a vehicle through that dealer in the
following month. Note that this may affect vehicle delivery timing.

How will each dealer know/receive their monthly order allowance number?
The number will appear on their Nissan LEAF Dealer Dashboard (accessed through
NNAnet.com>My Workspace>Nissan LEAF Customer Order Management). The number will
appear as “static” and not count down as orders are processed through the month. It will
only change when the next month’s allowance is in place.

 

[palmermd]

how are they calculating this number? Are they using the sales volumes of the other vehicles? Are they using the sales volumes of Leaf's in the first two months of ordering? Seems like a strange way to force redistribution. It will certainly make the discounts go away for many future orders. If a dealer had a lot of agreements to sell for $1000 off MSRP and they have only a few allotments for the month, they will certainly loose some sales.

 

[cdub]

Woah... glad I ordered when I did.

Maybe Fontana Nissan was getting all of the SoCal orders?

 

[GilSchoonover]

how are they calculating this number? Are they using the sales volumes of the other vehicles? Are they using the sales volumes of Leaf's in the first two months of ordering? Seems like a strange way to force redistribution. It will certainly make the discounts go away for many future orders. If a dealer had a lot of agreements to sell for $1000 off MSRP and they have only a few allotments for the month, they will certainly loose some sales.

Without getting into the exact formula, it is based on the dealer's number of sedan sales (last 90 days), and the # of LEAF reservations in the dealer's market area, and the # of available LEAFS for that month.

 

[evnow]

Hmmmm ... I guess a lot of dealers were not getting Leaf orders forcing this change.

It will be interesting to see how this will play out.

 

[palmermd]

Without getting into the exact formula, it is based on the dealer's number of sedan sales (last 90 days), and the # of LEAF reservations in the dealer's market area, and the # of available LEAFS for that month.

Thanks. It does make some sense to try and get people to by from one of their "more local" dealers.

 

[GilSchoonover]

how are they calculating this number? Are they using the sales volumes of the other vehicles? Are they using the sales volumes of Leaf's in the first two months of ordering? Seems like a strange way to force redistribution. It will certainly make the discounts go away for many future orders. If a dealer had a lot of agreements to sell for $1000 off MSRP and they have only a few allotments for the month, they will certainly loose some sales.

Without getting into the exact formula, it is based on the dealer's number of sedan sales (last 90 days), and the # of LEAF reservations in the dealer's market area, and the # of available LEAFS for that month.

And, as the person who has ordered all my dealer's new vehicles for the last five plus years, I can tell you that it is very similar to the method which NISSAN uses to allocate every other model (i.e., the ALL-NEW JUKE) to dealers. Personally, I'm surprised they took this long to impose the allocation.

 

[Boomer23]

Yikes! This will change a lot of things for buyers, besides reducing the competition that drives discounting.

Customers could be in the position of having arranged a deal with their preferred dealer, then finding that they have to find a new dealer at the point of trying to order via the RAQ process, or else wait until the beginning of the next month. That will mean that buyers from this point on need to arrange deals with several dealers in advance so that they are not delayed in ordering if their first choice dealer reaches his limit.

People in areas with few Nissan dealers are going to need to shop multiple dealers in a wider geographic area to be sure of having a backup deal in place.

 

[evnow]

And, as the person who has ordered all my dealer's new vehicles for the last five plus years, I can tell you that it is very similar to the method which NISSAN uses to allocate every other model (i.e., the ALL-NEW JUKE) to dealers. Personally, I'm surprised they took this long to impose the allocation.

The current method has been very popular with customers like us - and has been quoted widely in the press as superior to the allocation method GM has used for Chevy that has resulted in price gouging.

 

[Long4Leaf]

So, if there are say 20 LEAF's going to be delivered to region for a given month and 5 dealers, will the total allotment of the 5 dealers add up to 20? This would be very bad news and destroy the whole process. In this case, if I as a dealer was allotted 4, I could just increase the price to whatever I wanted, wait for the other 4 dealers to use up their 16 allottments and the customers will have to pay my price or wait until next mont when they can try again.

 

[greenleaf]

This sounds like a step backwards for Nissan.

 

[palmermd]

This sounds like a step backwards for Nissan.

This change is good for the dealers who were holding out for MSRP+, bad for the consumers. I did like the original setup better, but I'm sure there were quite a few dealers complaining about not having any customers or cars.

 

[Gonewild]

Hmmmm ... I guess a lot of dealers were not getting Leaf orders forcing this change.

It will be interesting to see how this will play out.

I know a lot of poeple in Arizona where ordering from Ca and Wa. Pizzed off a lot of AZ dealers :mrgreen: :mrgreen: :mrgreen:

 

[greenleaf]

This sounds like a step backwards for Nissan.

This change is good for the dealers who were holding out for MSRP+, bad for the consumers. I did like the original setup better, but I'm sure there were quite a few dealers complaining about not having any customers or cars.

I have no sympathy for dealers who did not get any orders because they are holding out for MSRP+. This new system is almost the same as the GM Volt system where a dealership is "allocated" a certain number of cars and it is up to the customers to "bid" for them.

 

[Gonewild]

This sounds like a step backwards for Nissan.

This change is good for the dealers who were holding out for MSRP+, bad for the consumers. I did like the original setup better, but I'm sure there were quite a few dealers complaining about not having any customers or cars.

I have no sympathy for dealers who did not get any orders because they are holding out for MSRP+. This new system is almost the same as the GM Volt system where a dealership is "allocated" a certain number of cars and it is up to the customers to "bid" for them.

They did not say we could not order out of state only it would use up some of the dealer numbers.

 

[mossyleaf]

Good to know this won't affect some dealers!

 

[greenleaf]

The effect of this change would reduce the discount we are seeing.

Suppose we have the following:

MSRP less 1% : expected to attract 10 more orders per month
MSRP less 2% : expected to attract 20 more orders per month
MSRP less 3% : expected to attract 30 more orders per month
MSRP less 4% : expected to attract 40 more orders per month
MSRP less 5% : expected to attract 50 more orders per month

Previously, a dealership might decide that they will discount more and make up for the lower profit margin by selling more. And it works for them.

Under the new system, they find that even if they discount 5%, they can only sell 20 more units per month (for example). So, there is no incentive to continue the discount.

 

[Gonewild]

My group in Phoenix AZ we ordered almost 10 cars from Rairdon's in Wa. I should be OK my quote is approved already. :mrgreen:

 

[evnow]

Under the new system, they find that even if they discount 5%, they can only sell 20 more units per month (for example). So, there is no incentive to continue the discount.

Yes - all good things must come to an end

But, I guess there will still be some dealers in far flung suburbs or outside the main city who are willing to discount to "fill their quota".

 

[mossyleaf]

The good times will keep rolling with me, SD folk don't be discouraged.