Volkswagen Dealers Could Sue to “Stop the Insanity”


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 (and 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 the revolt of a group of fed-up dealers.

Just a couple of years ago, Volkswagen had its sights set on becoming the largest automaker in the world, preparing its dealerships to sell upwards of 800,000 vehicles per year. The dealers invested over a billion dollars to get ready for the onslaught of customers. Instead, sales have fallen to below 350,000 vehicles per year, and dealer owners are feeling ignored by a heavily distracted Volkswagen, which is busy 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 general public distrust of the company. Add to that VW’s failure to provide a solution for the affected vehicles and it’s hard even to get people through dealership doors, much less get them to drive home in a new Volkswagen.

On top of that, VW’s CEO of America, Michael Horn, who was perhaps the biggest advocate for U.S. dealers, has left the company.

Then there’s VW brand chief Herbert Diess’s comment at this year’s Detroit Auto Show:

VW may do well to revisit a near-premium product strategy with lower volumes.

That brief sentence implies that VW’s goals of high-volume sales, of beating Honda and Toyota in the U.S. market, are not possible. It also 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, who owns 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.

Have you visited a Volkswagen Dealer since the emissions scandal broke?


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1 Comment

  1. Volkswagen has endangered my life, your life, and the lives of everyone on the planet. Top management and perhaps the entire board should resign and be replaced immediately. People should go to jail, and fines levied to the fullest extent of the law. If it bankrupts a corporation as large as VW, so be it. Perhaps then other corporate leaders might think twice before knowingly endangering peoples lives.

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