Volkswagen of America went through a growth spurt. Now the brand and its dealers are feeling growing pains.
VW's top U.S. executives spent the past three years charging toward the ambitious goals set by their bosses in Germany, more than doubling the VW brand's U.S. sales, thanks to the redesigned Jetta, Passat and Beetle.
But heading into 2013, they had no new high-volume car for U.S. stores to sell. And as VWoA executives strained to keep the VW brand on track toward its goal of selling 800,000 cars by 2018, they pushed their dealers hard -- and found themselves at odds over lofty sales goals.
In January and February, a record 75 percent of VW dealers responded to the National Automobile Dealers Association's survey of dealer satisfaction. The brand took a nose dive, finishing last among all brands for its dealer policies.
Respondents' written comments "bore this out as well," according to a summary of the findings obtained by Automotive News.
"Many of them mentioned troubled dealer-factory relations as their main concern," according to the document.
Jimmy Ellis, a VW dealer from Atlanta and chairman of the Volkswagen National Dealer Advisory Council, said VW dealers were more content over the past few years.
Sales were growing at a double-digit clip every month. VW's bonuses -- worth as much as $750 for a car with a sticker price of $25,000 -- were within reach.
But in January and February, many dealers missed bonuses when they fell short of VW's goal of increasing sales by about 10 percent, Ellis said.
So far in 2013, VW brand's monthly U.S. sales have failed to advance 10 percent, rising 7 percent in January, 3 percent in February and 3 percent in March. Sales fell 10 percent in April, which VW executives attributed to fierce competition in the compact and mid-sized sedan segments.
VW executives "did not get the growth we expected to get" because the original sales objective was a stretch, VW brand sales chief Frank Trivieri said. Since the start of the year, dealers' gripes to Trivieri and Volkswagen Group of America CEO Jonathan Browning have come hard and heavy.