U.S. Car Dealers to Take on Volkswagen's Direct Sales Model

Automobile dealer groups in the United States are preparing to fight against Scout Motors' strategy of selling vehicles directly to consumers, a move that bypasses traditional dealership networks. Scout Motors, a division of Volkswagen AG traded under the VOWG_p ticker on ETR, announced on Thursday that it would adopt a sales model similar to that of electric vehicle manufacturers like Tesla, listed on NASDAQ: TSLA. This model involves direct sales and service of vehicles, promising full price transparency.

The National Automobile Dealers Association and state associations announced their intentions on Friday to challenge Scout Motors' direct sales model through legal and legislative actions nationwide. The opposition from dealer groups coincides with a period of change in automotive sales strategies, where some manufacturers prefer to do business directly with customers rather than through independent retailers.

Scout Motors' announcement signifies a significant shift in how Volkswagen's vehicles will be marketed and sold in the U.S. and aligns with a broader trend among electric vehicle manufacturers favoring direct-to-consumer sales. However, this approach is facing resistance from established car dealers who are preparing to take their complaints to courts and state legislatures. The outcome of these struggles could impact the future structure of automobile retailing in the United States.