Volkswagen dealers blindsided and worried by Scout announcement
You know how one side in a conflict will write a message on a bomb before dropping the incendiary on the opposite side? Well, we didn’t know this at the time, but that’s what Volkswagen did a few weeks ago. The VW Group grabbed a wasp’s nest, wrote “Scout” on it, and lobbed it into the Volkswagen brand’s U.S. dealer body. Seems the mothership neglected to tell its dealers it had a battery-electric Scout revival in the works, which is especially unusual considering prototypes are due next year, and two products are planned for production at a new factory in the U.S. in 2024. Normally about this time we’d be reading reports in Automotive News where anonymous dealers describe seeing early versions of an unnamed, amazing new product that’s going to rock the U.S. market. Instead, the only thing dealers are describing are their confusion and suspicions.
We’re still getting Autonews reports, just with a different tone. As a sign of how secretive VW is being, Scott Keogh, CEO of VW USA, told AN, “Everything that I know has been reported and you have reported it.”
The roughly 650 Volkswagen dealers in the U.S. are concerned the automaker plans to circumvent the traditional dealer model with the Scout. When announced, the carmaker said the Scout brand would be “a separate, independent company … established in the U.S,” and Keogh told AN “it won’t be operated through the Volkswagen brand. In fact, it won’t be operated through Volkswagen Group of America. It will be operated independently,” with its own management team. The national dealer body and state dealer bodies have blown up Keogh’s email inbox and likely his old fashioned mailbox with certified letters alternately asking and demanding to know what the distribution plan is. Beyond the sanctity of dealer franchise laws, their beef is that they endured the dieselgate beating, they’ve invested in the electrification overhaul needed to sell products like the ID.4 and gotten precious few ID.4s to sell, and they’ve been asking for products just like the Scout — a properly rugged pickup and SUV. So why wouldn’t they be given the chance to sell Scouts?
Everything VW execs have said in the meantime leans in the way of dealer suspicions being correct, that VW’s planning standalone Scout franchises or possibly direct sales, and current outlets might not get a look in. AN wrote that U.S. sales honcho Andrew Savvas informed dealers “they will have no claim on [Scout] products.” The president of the North Carolina Automobile Dealers Association told Keogh, “The widespread belief is that the underlying reason VW is planning to create a parallel dealer network is VW’s intention to reduce the VW dealer count.”
Even production will be walled off from the VW brand. The VW Group is is expanding and overhauling its Chattanooga, Tennessee plant to build the ID line of vehicles, but said last week it would decide on a location for the Scout production facility, which could include a battery manufacturing plant as well, by the end of this year.
Keogh advised the sale folks they’ll have their questions answered “when there is a Scout management team, that team comes in and meets the press and meets the markets and tells its story. And that’s really all there is to say.” Ooof. The only spark of hope for dealers comes from rubbing two separate statements together. Group CFO Arno Antlitz told Reuters that the brand is considering an electric pickup as part of VW brand electrification plans, as well as commercial vehicles, and Keogh said the new platform the Scout will use “could definitely provide an opportunity for non-Scout vehicles.”
But a storm’s a-comin’. And somewhere in it, there will be an Atlas-sized SUV and a Ford Ranger-sized pickup expected to start at around $40,000.
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