Volkswagen, Scout and America’s Dealers

For more than 70 years, franchised dealers have sold and serviced Volkswagen vehicles in communities across America. Now, Volkswagen plans to bypass those dealers and sell its new Scout brand of electric trucks and SUVs directly to consumers.

That decision is bad for consumers, dealers and Volkswagen. Consumers purchasing expensive, technologically complex vehicles need convenient access to parts, repairs, warranty work and recalls. Volkswagen dealers already provide that infrastructure, along with the price and service competition that comes from independent retailers competing for customers.

The decision is also a significant departure from Volkswagen’s longstanding dealer partnerships. For decades, VW dealers have invested heavily in the brand while asking for more trucks and SUVs tailored to American consumers. Now that Volkswagen is entering the market with Scout, it plans to leave those dealers behind.

The strategy makes even less sense given Volkswagen’s significant financial challenges. Dealers provide the facilities, employees, capital, inventory support and local expertise Scout needs without Volkswagen building an entirely new retail and service network from the ground up.

NADA believes Volkswagen should put its existing dealer network—and the franchise system—to work for Scout and its customers.