About how the Scout models will be sold, the management of the Volkswagen Group in the USA had a long discussion. In May 2022, the existing dealers of the VW Group brands already had an inkling that Scout Motors could choose a direct sales model.
At the unveiling of the Terra and Traveler models, Scout Motors CEO Scott Keogh confirmed that the company would be going down that route, much to the chagrin of dealers.
Dealers are seeking support in the fight against direct sales from the National Automobile Dealers Association and the Society of Automotive Dealers, which are planning legal action to try to change the strategy of the Scout brand.
Volkswagen wants to close at least three German factories and cut tens of thousands of jobs
Economic
John Devlin, chairman of the company’s 2024 board of directors, said Scout could face serious setbacks across the U.S. because retailers are not going to accept the decision.
Complicating the situation for dealers is the fact that Scout operates as an independent company, which allows it to make direct sales without clashing with the franchise network of dealers. According to Sam Fiorani, vice president of AutoForecast Solutions, Scout’s franchise protection rules would only apply if the brand was directly under Volkswagen.
Scout Motors wants to establish a direct relationship with customers – booking, sales, delivery and service will be direct and transparent. Customers will know the final price in advance and the purchase itself should be quick.
The Terra and Traveler models will be on display in designated stores in the US, where it will be possible to try them on. In addition, Scout is preparing its own service centers and expects that 80% of repairs can be carried out outside these centers, for example directly at the customer’s site or on the road.
Volkswagen launched two off-roaders of the reborn Scout brand
AutoMoto
The Battle of Scout: A Sales Saga
Let’s dive into a story where dealers are not just sellers but warriors fighting off a new breed of challenge—a direct sales model!
The Scout Initiative
Volkswagen’s decision to roll out its Scout models has stirred quite the ruckus among its U.S. dealerships. In the exciting world of automotive sales, keeping your dealers happy is like keeping your dog on a leash when there’s a squirrel in sight—quite challenging! In May 2022, VW Group dealers sensed a shift in the winds when whispers of a direct sales model began to circulate. Fast forward to the grand unveiling of the Terra and Traveler models, and we have CEO Scott Keogh dropping the bombshell that Scout would make its sales direct and personal, much to the chagrin of the dealers, who were likely left feeling as deflated as a punctured tire!
Dealers on the Defensive
With claws sharpened and feelings running high, dealers have turned to the National Automobile Dealers Association and the Society of Automotive Dealers for backup. Their plan? A legal blitz aimed at slowing down the Scout train before it leaves the station. It all sounds like a script out of a legal drama, doesn’t it? With dealers feeling threatened, it’s like watching a boxing match where one side suddenly decides they’re going to get all up close and personal, and the other side gets… well, punch drunk!
Economic Fallout
As if the ruckus over direct sales wasn’t enough, there’s talk of Volkswagen closing down at least three German factories and cutting tens of thousands of jobs. Where’s the popcorn? Someone pass the snacks because this is getting spicy! John Devlin, the chairman of the company’s 2024 board of directors, is raising alarm bells that Scout may just find itself in hot water if the retailers keep their protest level cranked up to eleven.
Independent Operations: A Double-Edged Sword
Here’s where it gets juicy—Scout operates independently, which means they can strut about selling directly to customers without the pesky interference of existing dealer agreements. According to automotive wizard Sam Fiorani, the franchise protection rules are about as effective as a chocolate teapot in this scenario. If Scout were a house, it would be the one with a fancy ‘Keep Out’ sign, and dealers are left scratching their heads wondering if they’ll need to file for a restraining order!
The Promise of Transparency
But what’s the payoff for customers? A promise of a direct relationship where booking, sales, delivery, and service are all handled with transparency. Imagine knowing your final price before you even kick the tires! Heck, it’s even preferable to shopping for a new sofa where you spend ages haggling over price and quality, only to find out you have to carry it yourself out of the store! Plus, customers can expect quick transactions. This isn’t a mystery novel; it’s car buying made easy!
Service Centers and Repair Revolution
Scout is also setting up designated “try them out” stores where customers can kick the tires on the Terra and Traveler models. To top it off, Scout’s planning service centers with an ambitious goal: 80% of repairs might be done at customer sites or on the go. Picture that—no more waiting in bland waiting rooms with tired magazines! Instead, it’s like having a mobile mechanic who might even offer you a biscuit while he fixes your car! Now, that’s service!
The Road Ahead
With the rebirth of the Scout brand and these off-roaders entering the market, it’s clear that the automotive landscape is about to shift gears—perhaps quite literally. Now, whether dealers can change the course of this vehicle frenzy or whether Scout will race ahead unimpeded is anyone’s guess. But for now, it seems like we’re in for one heck of a ride!
Roll up those sleeves, people! The automotive world is not just a drive in the park—this is a race of epic proportions!
In discussions surrounding the sales strategy for the Scout models, management at Volkswagen Group in the United States engaged in extensive conversations. By May 2022, existing dealers associated with VW Group brands began to suspect that Scout Motors might favor a direct sales approach, a model that would significantly alter traditional dealership dynamics.
At the recent unveiling event for the new Terra and Traveler models, CEO Scott Keogh of Scout Motors officially confirmed the company’s intention to adopt this direct-to-consumer sales strategy, delivering a blow to dealerships who were unprepared for such a shift.
In light of this new direction, dealers are actively seeking assistance from the National Automobile Dealers Association and the Society of Automotive Dealers. Both organizations are gearing up for potential legal action in an effort to challenge and possibly reverse the Scout brand’s sales strategy.
John Devlin, the chairman of the company’s board for 2024, indicated that Scout could encounter substantial opposition throughout the U.S. marketplace, as retailers have voiced their unwillingness to abide by the direct sales decision.
To make matters more complex for the dealerships, Scout operates as an independent entity, granting it the freedom to pursue direct sales without infringing on the established franchise network. Sam Fiorani, vice president of AutoForecast Solutions, noted that the franchise protection protocols would only come into play if Scout was fully integrated under Volkswagen’s corporate umbrella.
Scout Motors aims to cultivate a direct relationship with its customers, ensuring that all stages of the buying process—including bookings, sales, delivery, and service—remain straightforward and transparent. Customers will receive upfront pricing, allowing for a quick and efficient purchasing experience.
The new Terra and Traveler models will be showcased in specially designated stores across the U.S., where prospective buyers can experience hands-on trials. Furthermore, Scout is laying plans for its own network of service centers, with expectations that a significant 80% of vehicle repairs will be handled outside these facilities, including on-site services directly at customers’ locations or even on the road.
