Calif. Dealer Group Challenges Scout Direct Sales
The dealers group called the plan to sell Scout vehicles directly ‘illegal,’ claiming it would violate state law prohibiting automakers to ‘compete with their franchisees.’
Pexels/Erik McIean
The California New Car Dealers Association issued a cease-and-desist letter demanding that Volkswagen and its Scout affiliate abandon plans to sell cars directly to consumers.
The group appeared to jump ahead of the National Automobile Dealers Association, which vowed when the dealer-skirting plans were announced in October to challenge them.
CNCDA, which said it’s the largest state-level dealers association and that it represents more than 50 VW stores, said it aims to “protect both the franchise system and California consumers while promoting legal and ethical business practices.”
It called the plan to sell Scout vehicles directly “illegal,” claiming it would violate state law prohibiting automakers to “compete with their franchisees.”
The group said such direct sales could cost thousands of dealership employees their jobs, “significantly impact tax revenues,” and compromise consumer choice, fair pricing, and competition.
“We strongly encourage Volkswagen to heed our call to abide by California law and immediately stop offering Scout vehicles directly to consumers without using their business partner local dealers,” said group President Brian Maas.