In the ongoing Volkswagen diesel scandal, the a lot of obvious victims are the owners of the nearly 600,000 VW, Audi, and Porsche vehicles discovered to have actually illegal “defeat device” software.
These owners have actually been stuck in limbo for the past 6 months as Volkswagen has actually had a hard time to plot a method from the crisis that will certainly be approved by regulatory agencies.
But so also have actually the dealers that sold them those cars in the very first place.
When VW Group of America CEO Michael Horn stepped down earlier this month, dealers checked out that departure as the last straw—and took their pertains to straight to Volkswagen headquarters in Wolfsburg, Germany.
When Horn left, dealers felt they had lost their just champ within VW management, Alan Brown, chairman of the Volkswagen National Dealer Advisory Council, explained in a recent interview along with Automotive News (subscription required).
Brown and two various other members of the council traveled to Wolfsburg, meeting along with VW global grand boss Herbert Diess, newly-appointed North America boss Hinrich Woebcken, global sales boss Juergen Stackmann, and North America sales boss Ludger Fretzen.
The U.S. delegation hoped to relay their situation to Volkswagen’s top-degree executives. along with the exception of the now-departed Horn, U.S. dealers largely feel top VW management does not take them seriously.
Since the scandal began, Volkswagen sales have actually dropped, and so have actually resale values.
And the diesel models that previously earned up 25 percent of VW brand sales could well not be certified in time for the 2016 model year.
“Not having that product has actually afflicted the dealer network,” Brown said.
In California, TDI models previously represented 45 percent of sales at numerous dealers, he said.
Because they are still unsure Once Volkswagen will certainly recall their cars, Brown said numerous TDI owners are Additionally reducing on normal maintenance—a severe source of income for dealers.
Because of the two the lost company and damage to the brand, Brown said dealers will certainly seek some form of settlement package from Volkswagen.
He suggested the quantity of discretionary funds dealers are offered by the business could serve as a metric for identifying compensation, Yet VW hasn’t agreed to anything yet.
Volkswagen executives predicted earlier this year that U.S. sales could at ideal hold constant at 330,000 units.
But Brown thinks the business must shoot for 500,000 sales—a number much more realistic compared to the previous and widely derided objective of 800,000 cars in 2018.
The less-ambitious objective of 330,000 “does zero Yet shed Volkswagen a ton of money” and reduce dealer returns on sales, he claims.
VW has actually had a relatively fragile placement in the U.S. market in recent years, as it fell behind in responding to trends, from the rise of SUVs to the proliferation or hybrids and battery-electric cars.
The business has actually tried to expand its U.S. presence in recent years, opening a factory in Chattanooga, Tennessee, and redesigning the Passat mid-dimension sedan to much better fulfill American tastes.
But considerably of that job could have actually been damaged by the diesel scandal.
In the short term, Brown believes Volkswagen can easily increase U.S. sales by cutting Passat prices to attract buyers.
He would certainly Additionally enjoy greater numbers of low-end Beetle models, and for U.S. must take precedence Once allocating the two the Brand-new Tiguan crossover and the upcoming Golf Alltrack wagon.