DETROIT - Volkswagen of America Inc. wants half of its 600 VW-brand dealers in the United States to be exclusive, or at least have a separate showroom, by 2002.
Dealers are making money and selling all the Volkswagen cars they can get.
'We have sat down with our dealers and have said, `Look guys, you now are finally making good money, but we need a dedicated brand identity - work with us,' ' said Gerd Klauss, president of Volkswagen of America.
'We are very confident that in two to three years, half of the dealer body will be ready. But it does take time.'
At the beginning of 1999, VW had 81 exclusives among its 605 dealerships.
The company sold 315,563 Volkswagens in the United States last year, up 43.6 percent from 1998. It was the first time in 25 years that VW sales have topped 300,000. Including Audi, which was up 38.8 percent last year, the group's U.S. sales totaled 381,522.
Volkswagen dealerships now are averaging about 500 new-vehicle sales per year, Klauss said, during an interview.
'Our dealers have volume now as they had once in the Golden Age of the original Beetle,' Klauss said. 'So our dealers see enormous volume, which they haven't seen in so long.'
Volkswagen helps its dealers financially when they are ready to go exclusive, Klauss said. He would not give details.
To guide dealers as they consider becoming exclusives, Volkswagen has a blueprint called the Volkswagen Marketplace. It is based on the concept of a European town market, with everything radiating from the center of activity.
Service, parts, accessories, a children's play area, financing and customer work stations and lounges radiate from the center of the showroom.
Fifteen dealers opened Volkswagen Marketplaces in 1999. By the end of 2001, another 200 dealers either will open a new Volkswagen Marketplace facility or will remodel using the marketplace blueprint, the company said.
Gene Langan, dealer principal of Langan Volkswagen Meriden in Meriden, Conn., opened the first Volkswagen Marketplace in August.
'You will know you're in a Volkswagen dealership when you go in one,' Langan said. 'It's a very comfortable place to do business.'
The showroom is open and airy, and customers are drawn to a curved 'focal wall' with a 20-foot-high mural depicting old and new Volkswagens and various lifestyle scenes, he said. Sales offices are on the fringes of the showroom.
RESPONSE TO GROWTH
The addition of Volkswagen Marketplaces 'will help enhance the brand and create the service and retail capacity to keep up with this phenomenal growth,' Klauss said.
'You can't operate out of tired facilities. I understand my dealers had many years when they didn't make good money. But the last two or three years, they did make good money. Dealer profitability doubled this year vs. last year.'
Volkswagen is generating many conquest sales from owners of Japanese brands, and it must improve the quality of its service to meet the high expectations of those new customers, Klauss said.
'The Japanese have spoiled their customers with top services,' Klauss said. 'The customers want the royal treatment. The Japanese gave it to them - and the Germans better give it to them, too, otherwise the customers are disappointed.'
Volkswagen has set a modest increase of nearly 11 percent, to 350,000 units, as its sales goal for 2000.
That still is double-digit percentage-point growth, albeit on the conservative side, said Jens Neumann, Volkswagen AG management board member for North America.