VW Dealers Beware: Scout Warns Against Direct Sales Battle
Scout Motors has set the stage for a legal showdown with Volkswagen as it gears up for direct-to-consumer (DTC) sales of its electric vehicles. The California New Car Dealers Association (CNCDA) has thrown the first punch, sending a cease-and-desist letter to Scout over its retail approach. The battle lines have been drawn, and the stakes are high.
Legal Showdown Looms
The conflict stems from Scout’s decision to bypass traditional dealerships and sell its electric vehicles directly to consumers. This move has ruffled feathers in the automotive industry, particularly among VW dealers who see Scout as encroaching on their turf. The CNCDA has taken swift action to block Scout’s DTC model, citing California law that prohibits direct competition with existing franchises.
Scout Fights Back
In response to the CNCDA’s cease-and-desist letter, Scout’s General Counsel, Neil Sitron, has fired back, asserting the company’s independence from Volkswagen Group of America (VWGoA). Sitron argues that Scout has the right to sell its branded vehicles directly to consumers and will vigorously defend against any legal threats.
Industry Backlash
The automotive industry is closely watching this legal showdown, with the National Automobile Dealers Association (NADA) also expressing concerns over Scout’s retail plans. Outgoing NADA Chairman Gary Gilchrist has made it clear that automakers who undermine dealership partnerships will face opposition, setting the stage for a potential legal battle that could have far-reaching implications.
As the battle lines are drawn and tensions rise, one thing is certain: the automotive industry is in for a showdown of epic proportions. Stay tuned as the drama unfolds, and see how Scout Motors navigates the choppy waters of direct-to-consumer sales in a fiercely competitive market.