U.S. Volkswagen Dealers Are Poised to Revolt

Volkswagen has been on the ropes for months as regulators, governments and the buying public rain blows in the wake of the diesel emissions scandal, but its newest foe might come from the inside — its U.S. dealer network.

American dealers are feeling abandoned by their distracted German parent and could be on the verge of open revolt, Automotive News reports.

The problems facing the dealers are many.

After investing $1 billion over the past decade to expand and upgrade the dealer network — part of Volkswagen’s plans to sell 800,000 units per year in the U.S. and become the world’s largest automaker — sales have fallen to less than half that number.

In addition to the recalls, the stop order on new and pre-owned diesel models and Volkswagen’s delay in finding a diesel fix, problems have cropped up in the supply and allocation process.

Now that the man who kept the dealers placated from the outset of the scandal is gone, an even bigger problem exists for Volkswagen management. Michael Horn, president and CEO of Volkswagen Group of America, stepped down suddenly on March 9, leaving dealers without their biggest champion.

To have their concerns heard, Alan Brown, head of Volkswagen’s national dealer council, plans to lead a delegation to Germany this weekend to get promises on product strategy and volume in writing.

“We’ve got to stop the insanity,” said Brown, who predicts a revolt at the March 31 National Automobile Dealers Association convention if Volkswagen doesn’t respond to their satisfaction.

Volkswagen is already facing lawsuits from a range of litigants — not the least of which is the United States government — but there’s now a very real possibility that dealers could also join the fray.

Steve Kalafer, the outspoken owner of a 17-franchise dealer network, has stated that a Volkswagen dealer group is definitely planning to go after the automaker.

[Image: Volkswagen of America]