A number of state dealer associations — which work to protect franchise laws for their members — have either already written to Keogh or were in the process of doing so, according to several VW dealers and association executives from across the country who spoke to Automotive News. The communications are expected to vary in tone, just as state franchise laws vary, but generally demand more information on how Scout vehicles will be retailed and assert that VW and Audi dealers not be left out in the cold.
One example, sent Monday, May 23, from the North Carolina Automobile Dealers Association, is believed to be broadly representative. In it, NCADA President Robert Glaser wrote: “Despite repeated assurances throughout the years by Volkswagen that its dealers are ‘partners’ in advancing and promoting VW products, this announcement produced instant dismay and concern among all VW dealers.
“Certainly, given the strong history of a supportive and effective VW dealer network, even during the diesel-gate fiasco, the clear expectation would be that current VW dealers would be given the first opportunity to enlist as a Scout dealer. However, the widespread belief is that the underlying reason VW is planning to create a parallel dealer network is VW’s intention to reduce the VW dealer count.”
Glaser said the Scout announcement was “very alarming and puzzling — to the current dealer network,” which had spent years asking for those very products, and with no mention of how they would be sold. Glaser also pledged that his organization “will use every legitimate resource available to enforce its existing franchise laws that prohibit VW and all other factories and distributors from selling vehicles in North Carolina in competition with their franchised dealers.” Automotive News left a message with NCADA seeking further comment.
A letter from the Ohio Auto Dealers Association called the situation “untenable.” A letter from Texas sought to quantify VW dealers’ previous investments in support of VW’s electrification plan, and their lack of return so far on that investment because of production issues with the ID4 in Germany.
“By adding a new Scout line and not providing a pickup truck to the VW line is disconcerting and discounts the VW line. As a company that promotes the value of partnership, the Scout line belongs with the VW dealers,” Texas Automobile Dealers Association President Darren Whitehurst wrote, adding that one Texas dealer had spent $140,000 on store upgrades and thus far received just 21 ID4s to sell.
