VW Dealers Angry About Scout's Direct Sales Model
In case you missed it, the Scout name is back after a 40+ year hiatus. The new marque unveiled two new EVs yesterday, the Traveler SUV and the Terra, a truck.
How Scout plans to sell its vehicles differs from the brand’s parent company, Volkswagen. According to a report from Automotive News, Mike Stanton, CEO of the National Automobile Dealers Association (NADA) called Scout’s plan to sell directly to consumers—as marques like Rivian and Tesla do—disappointing and misguided. Stanton threatened that Scout’s direct-to-consumer model “will be challenged.”
Per AN, VW dealers aren’t happy either. Charlie Hall, chairman of the Volkswagen National Dealer Advisory Council said that VW gave “zero” communication ahead of Scout’s plans to sell DTC.
While dealers say they’d jump at the opportunity to sell Scout products, the automaker sees things differently. Scout plans a ground-up consumer experience that isn’t wholly dissimilar from Lucid, Rivian, and Tesla’s models. An app will handle everything, from reservations to sales, delivery, and service. Dedicated retail spaces will help to build relationships with buyers, and buying a vehicle will take “minutes.”
There are absolutely some legal concerns with Scout’s plan. For starters, due to franchise laws present in several states, Scout, as a VW brand, may be barred from competing with Volkswagen dealerships. This route alone could limit the number of states where Scout can sell straight to consumers.
Almost certainly, legal battles are on the horizon for the new company, which is taking $100 deposits for both models, which are set to begin production in 2027.
Become an AutoGuide insider. Get the latest from the automotive world first by subscribing to our newsletter here.
Chase is an automotive journalist with years of experience in the industry. He writes for outlets like Edmunds and AutoGuide, among many others. When not writing, Chase is in front of the camera over at The Overrun, his YouTube channel run alongside his friend and co-host Jobe Teehan. If he's not writing reviews of the latest in cars or producing industry coverage, Chase is at home in the driver's seat of his own (usually German) sports cars.
More by Chase Bierenkoven
Comments
Join the conversation
I suspect Stelantis wants the "direct to consumer" model to; which is why they're bankrupting the brands/dealers. Collapse the old show and start fresh.