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Volkswagen dealers in U.S. waiting for guidance

John Sepulvado Sep 24, 2015
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So we wondered what do you do if you’re a Volkswagen dealer in the U.S. and you’ve just been handed this big emissions scandal? What are you being told, and what are you telling customers? 

“Right now, we’re waiting for guidance from Volkswagen of America on how to address the concerns,” says Michael Patrick, a service and parts director at  HerzogMeier Volkswagen in Beaverton, Oregon. “We’re excited to help everybody once we know, and as soon as we do know, we’ll be willing and ready to take care of everybody.”  

Patrick says he’s gotten “quite a bit” of calls from customers about the scandal, but he doesn’t know what to say. And he’s finding out about the emissions software scandal the same way as everyone else: through media reports. At the moment, diesel engine cars at his showroom are sitting apart from other cars, with the sticker prices taken off. Volkswagen has told dealers not to sell them — but that’s about all many dealers have heard from the company. 

It “isn’t unusual” for local auto dealers to be kept in the dark about corporate plans, according to Jack Nerad, a Kelley Blue Book analyst. He says dealerships are often the last to hear about big problems from manufacturers, but they’re often the first to deal with the crisis.

“Basically [dealers] are the interface between a major global brand and a local market,” Nerad says. “They’re kind of the local face of that brand, and they do a very, very good job, generally.”

Nerad says dealers are part of the reason why this past July, sales of Volkswagen’s were up 5 percent from the previous year. Still, sales of the German cars lag way behind other top imports in the United States. Volkswagen sold 31,300 cars in July. In that same month, Toyota sold 217,181 autos, while Honda sold 146,324 autos.

Whether Volkswagen loses ground to its competitors depends on customers loyal to the brand, says Ken Elias. He’s a partner at auto consulting firm Maryann Keller and Associates, and he says the next few months are key.  

“Are consumers overall just going to avoid VW products?”  Elias says. “That’s the bigger question.”

Patrick, the local dealer in Beaverton, says U.S. diesel owners are among the most loyal customers Volkswagen has. Both Elias and Nerad say those loyal customers are also more likely to have the best relationship with their dealers.

And that, says Nerad, is the big reason dealers “will  most likely be the ones cleaning up Volkswagen’s mess.”

 

 

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