If you think this is a tough time to be a Volkswagen owner, imagine what it must be like to be a Volkswagen dealer.
Amidst the ongoing months-long diesel emissions scandal, governments, regulators, and the general car-buying public are pounding Volkswagen. With sales already hurting, the German automaker may also have to contend with a revolting group of fed-up dealers.
Just a couple of years ago Volkswagen had its sights set on becoming the largest automaker in the world and had prepared dealerships to sell upwards of 800,000 cars per year. Over a billion dollars was invested by dealerships to get ready for the onslaught of customers.
Instead, sales have fallen to below 350,000 and dealer owners are feeling ignored by a heavily distracted Volkswagen, which is dealing with potential recalls and pending lawsuits.
Now dealers are mobilizing to stop the insanity.
Volkswagen dealers are suffering because of the stop-sales order on new and used diesel vehicles in addition to the public’s general distrust of the company. Add to that VW’s failure to provide a solution for the affected vehicles and it’s hard to get people through dealership doors and even harder to get them to drive home in a new Volkswagen.
On top of that, VW’s CEO of America, Michael Horn, whom was perhaps the biggest advocate U.S. dealers, has left the company.
Then there’s the comment that VW brand chief Herbert Diess said at this year’s Detroit Auto Show:
VW may do well to revisit a near-premium product strategy with lower volumes.
That simple sentence implies that VW’s goals of high volume sales are not possible and that beating Honda and Toyota in the U.S. market is all but impossible. That one sentence spells financial catastrophe for the majority of U.S. VW dealers, and they intend to fight back.
Lawsuits involving auto retailers and their manufacturers are exceedingly rare, but that seems to be what’s coming down the road. At least one group of VW dealers are planning legal action against Volkswagen
Steve Kalafer, owner of a 17-franchise dealership, said,
For an auto retailer to sue his manufacturer, it’s kind of like a child firing his mother. It’s an unnatural act. For the dealers to go to this step is incredible.
It might take an incredible step, though, to turn around the falling brand and get dealers back on board with their manufacturer… or end the relationship altogether.
Will you visit a Volkswagen dealer when shopping for a new car?
-tgriffith
Find Certified Pre-Owned Cars and Used Cars in your area at CarGurus.
from The CarGurus Blog http://blog.cargurus.com/2016/03/15/volkswagen-dealers-could-sue-to-stop-the-insanity
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