Scout CEO Scott Keogh headed to uncharted territory

After decades spent working for others, Volkswagen Group of America CEO Scott Keogh this week was given control over a bag of seed money, handed the equivalent of a roughly sketched map and sent off on his own.

Keogh, 53, was named CEO — as well as the first and thus far only employee — of Scout, the nascent effort by its German parent to resurrect an off-road brand acquired last year, which hasn't existed in the marketplace for more than 40 years.

VW Group in May said it would create a separate, independent company to build Scout's electric pickups and SUVs starting in 2026 that will be designed, engineered and manufactured in the United States for U.S. customers. The company will initially invest about $100 million in Scout, two sources told Reuters. The Wall Street Journal at the time reported VW is aiming to eventually sell 250,000 Scouts a year.
 

For Keogh, who became CEO of VW of America in November 2018 and was handed a challenging mandate to double the VW Group's collective U.S. market share to 10 percent by 2028, the appeal of effectively building a startup from scratch without the normal investor and sourcing woes was, to say the least, appealing.

"For me, a kid from Long Island, it was, frankly, just too good to pass up. It's something I very much want to do, it's something I'm passionate about, and certainly something I'm going to try my darnedest to achieve," Keogh told reporters in a brief conference call.

"Most startups are borrowing money; you're down in Dad's basement, Mom's bringing down some scrambled eggs, and you do the best you can," the two-time Automotive News All-Star said. "I think the upside is yes, we want them to be lean, we want to be fast, we want to get the best of the market. But of course, we do have the backing and the scaling effects that come with the [VW] Group."

Keogh, who joined Audi as a marketing executive in 2006 after a stint at Mercedes-Benz, said he's going "to go from running a region, to running a company. But I want to be clear: It's a company of one person. I was running a business with 22,000 people across the country, so it's a heck of a transformation."

Keogh steps down from VW of America and fully ventures out on his own with Scout effective Sept. 1, when he will be replaced by Pablo Di Si, 52, who has headed VW's South American region. In a press release, the company credited Di Si, who joined VW in 2014, for leading the company's return to profitability in Latin America. "He also led a restructuring focused on cultural transformation, creating new business models, accelerating digitalization and improving client satisfaction," VW said. He was not immediately available for comment after the announcement of his new position.

Di Si's successor in South America will be announced in the near future.

VW's U.S. dealers were enthusiastic supporters of Keogh during his tenure, and their fortunes, as well as the brand's have improved greatly under his leadership. The first American to lead VW of America in 25 years, Keogh noted a nearly $1.6 billion-$1.7 billion turnaround in the brand's U.S. profitability compared with before the pandemic, helped in great part by its much broader selection of crossovers, which now represent more than 70 percent of its sales.

In his comments to reporters, the newly minted Scout CEO said nothing to quell dealers' concerns about how the Scout brand's two planned electric vehicles — a pickup and "rugged" SUV, to be built on a new platform somewhere in the U.S. — will be retailed. Nor did he say where or how they will eventually be assembled, where their batteries will come from, or when they will go on sale; only that the first prototypes will be shown in 2023.

Tom McMenamin, chairman of the VW National Dealer Advisory Council, was traveling and couldn't be reached for comment. However, former Chairman John Luciano, owner of Street VW in Amarillo, Texas, said Keogh's tenure atop VW will be missed.

"It's a good move for Scott," Luciano said, "but sad for us to see him go."

Reuters contributed to this report.