Diess Extends a Flimsy Olive Branch to Volkswagen Dealers

Steph Willems
by Steph Willems

Volkswagen dealers in the U.S. will get more vehicles to sell this year and next, but there’s still no word on possible reparations or when to expect a diesel emissions fix.

At a meeting with dealers at the National Auto Dealers Association convention on Saturday, Volkswagen brand chief Herbert Diess promised to “redefine” the brand and boost shipments of popular models, Automotive News has reported.

The meeting aimed to calm the fears of increasingly frustrated dealers while providing some certainty about product strategy. Despite promising to carry on with the strategy favored by departed Volkswagen of America CEO Michael Horn, Diess’ reassurances didn’t win over everyone.

Steve Kalafer, owner of a 17-franchise New Jersey dealership group, said the promises were “broad statements” and “nothing more than more of the same.”

Volkswagen sales, which have fallen since 2012, slipped a further 12.5 percent in the first quarter of 2016, placing most dealers in an unsustainable position. Dealers and their advocates generally agree that annual U.S. sales of 500,000 are needed to stabilize the brand and its network.

To grow sales, Volkswagen will ship 20,000 extra Tiguan crossovers to U.S. dealers and the same number of Beetle Classics, while volume of other models will rise in smaller amounts. The automaker plans to deliver 75,000 Golf Alltrack models in 2017, bolstering the 15,000 it will ship for the model’s late 2016 launch.

Muzzled by the law, Diess couldn’t discuss when dealers will be able to start fixing hundreds of thousands of diesel models caught up in the emissions scandal, including sidelined inventory that once made up a significant portion of dealer sales.

Franchise owners hoping for some acknowledgment of the need for compensation for sunk costs and diminished revenue will have to keep waiting. Diess didn’t comment on potential settlements.

A five-person committee of dealer owners was formed on Friday with the aim of extracting a reparations package out of Volkswagen, but work on that front has only just begun.

There’s no word yet on whether a lawsuit drafted on behalf of a group of dealer owners seeking compensation will be filed. The party behind the potential suit was waiting to hear what Volkswagen executives had to say at the NADA conference.

[Image: RudolfSimon (Own work) [ CC BY-SA 3.0], via Wikimedia Commons]

Steph Willems
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  • Seth1065 Seth1065 on Apr 04, 2016

    Well if there is a buyback or enhanced trade in for TDI's and VW wants to keep those customers they have to have something to get them into. Some would take the sports wagon which seems in short supply.

  • Vwsteve Vwsteve on Apr 04, 2016

    Selling VW's my whole automotive life and now GM of one of the larger VW stores in the nation, the new Upper Management of VW AG has now a much better understanding of the US Market and so far are much more engaged to make sure they do understand, hence the extra visits here to the US. Once the TDI issue is settled and we do have some ways to go with that, the new product will give us a much better chance of success here in the US. Our cars from the least expensive now turbo charged Jetta to the top of line Passats, do offer a more upscale driving experiance (european) that most of our competitors, add in all the extra incentives we have been given at this point, if you have the correct sales staff you can sell new VW's. Now is the time to re-think expenses, make sure your sales staff can make money, and in general ride out the next number of months, we will get better.

  • GregLocock Not interested at all. Apparently I've got Apple car play but I've never used it in 3 years. The built in nav is ok.
  • Corey Lewis Probably worth about what they're asking, given its condition. The color combo isn't a desirable one, they look sharper in non-beige shades. Like two-tone green, maroon, navy, or gray. The end of the time when MB built its cars properly. No shame in turning up in a clean W126, they'll always command respect.
  • Lou_BC Another way to look at this is the upgrading of hardware and software. ...............The average length of car ownership is 10 - 12 years ....................The average lifetime ownership of a cell phone is 2.5 years. ................................................................... My phone will remain up to date, my vehicle won't. Especially if you buy a new "end of run" model.
  • TheEndlessEnigma "...we could be seeing a foundational shift in how Americans and car buyers see Stellantis products." yeah, I view Stellantis products as being off the cross-shop list. Stellantis is doing an excellent job of killing the Chrysler and Dodge brands and turning Jeep into something it isn't.
  • 2manyvettes 495 hp in a base C8 is more than enough. 800+ hp in a ZR1 is not worth the extra $60k (plus dealer markups). Unless the buyer is going for bragging rights. I remember when the C7 Grand Sport came out, and a reviewer got his hands on one and put it on the track at Lime Rock. His conclusion? Save yourself $15k and skip the Z06 and get a Grand Sport.