Volkswagen's U.S. dealers will be on the front lines of trying to repair the damage from the company's emissions test cheating scandal. Meanwhile, they're incurring plenty of damage on their own.
Revelations of cheating and subsequent leadership turmoil at VW add more burdens to VW dealers already seething over a poor product mix, sagging sales and profitability, and an often cold shoulder from headquarters in Germany. Now they're dealing with unsalable new and used vehicles, the prospect of decreased dealership values and a loss of consumer trust.
"This is extremely serious in the big picture," given the recent decline in VW's U.S. fortunes, said Bill Wallace, owner of Wallace Volkswagen in Stuart, Fla., and nine other dealerships. "If this happened in 2012 when they had the new models out and they were on a roll, it would be a blip on the radar."
Last week's leadership shakeup spared VW's top U.S. executive, Michael Horn, who remains CEO of Volkswagen Group of America as part of a newly formed North America unit. The German executive had won broad support among VW's 650 U.S. dealers by offering relief from unrealistic sales targets and using his clout at headquarters in Wolfsburg to deliver more U.S.-friendly products and more resources to the U.S. arm. U.S. dealers rallied behind Horn after initial reports that he would be ousted.