Volkswagen Dealers Are Just Getting Started in Reparation Hunt
Volkswagen dealers in the U.S. want to be compensated for financial losses stemming from the diesel emissions scandal, and if the results of a recent meeting with company brass is any indication, the demands will soon grow louder.
Alan Brown, chairman of Volkswagen’s U.S. dealer council, led a small delegation of dealers to Germany last week to talk reparations and get a firm grip on the company’s strategy, Automotive News reports.
The size of the settlement they were seeking is unknown, but the meeting with global brand chief Herbert Diess and new Volkswagen Group of America head Hinrich Woebcken didn’t yield any plan to compensate dealers.
Volkswagen of America has been sending dealers an allowance to offset lost sales since shortly after the scandal broke, but that doesn’t cover the big losses some dealers have been hit with, nor does it take away the uncertainty of the future.
Though Volkswagen executives weren’t playing the reparation game just yet, they did shed some light on the brand’s strategy going forward.
Recent musings about Volkswagen becoming a higher-end niche brand sent dealers into a near panic, spurring Brown and others to go looking for assurances.
In a letter distributed to U.S. dealers following the meeting, Brown said Volkswagen had committed to continuing a mass-market strategy of compact and midsize cars and crossovers.
In the short term, Volkswagen was strong-armed by the dealers into providing a larger shipment of 2017 Golf Alltracks, a recently-announced variant of the Golf SportWagen, in order to generate interest and (hopefully) increase sales.
Reparations are sure to be a key topic among Volkswagen franchise owners at the April 2 National Automobile Dealers Association convention in Las Vegas — an event both Diess and Woebcken have said they will attend.
More by Steph Willems
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VW can still save it. VW's niche, for years, was a good handling smaller car, and the lack of customization for the US market was a selling point, not an issue. The owners put up with the bugs because of this. These are the GTi buyers, the R car buyers, but they aren't enough for a mass market brand, or one which aspires to it. Showing us the Scirocco every six months only tweaks the fanbois (guilty here), but is meaningless for the rest of the world. VW has always suffered from the issue of having a euro price point. Cars in Europe are lots more expensive, even before VAT. You won't sell many 35k Golf in the US. Game change. VW needs to do a Hyundai warranty. Having been at the short end of VW "warranty", they need this for the general public. Only Acura sucks as bad for warranty service. VW needs to fix the TDI debacle now. Buy back, make a deal, finish it. You can't pull this band aid off slowly. I recently saw a TDI with a "DAS FRAUD" bumper sticker on it. If this is what your fanbois are doing.... The rest of the market has moved. You can get a well built, sport oriented small car from just about everyone now. Long gone are the days a Jetta went against a Tempo. VW needs to get some US folks to design here in the US and send the plans back to Germany. It works for everyone else in the US market. I've no sympathy for car dealers of any sort, but I can see if I'd invested millions of dollars in good faith, built that glam showroom the OEM is pushing me to do, that I'd be calling my attorney every day to see what heat I can put under VW-USA.
VW seems to be in a state of paralysis and denial. They apparently hardly recognize they have dealers in the US and Canada,and expect them to do exactly as told. Having the dealers kick up a fuss was never something they planned on. This company, with its leaders having already resigned and used to having orders barked from the top down, is a ship barely afloat in stormy seas with a missing rudder. Six months into the scandal, they still haven't come up with a plan to fix the diesels outside the EU, where they have officials in their back pocket who approved the ludicrous fixes like a software reflash and $1.64 flow straighteners. South Korea has gone after VW just as hard as the US, and is having the same problem of no solution forthcoming. A fine has already been assessed. The VW boss said he is waiting on Wolfsburg: http://english.yonhapnews.co.kr/news/2016/03/23/0200000000AEN20160323007700315.html