Coming off their lowest sales year in the U.S. since 2010 and still looking for answers from their automaker on its surprise creation of another brand in 2022, Volkswagen dealers might arrive for their make meeting on Saturday morning loaded for bear.
But that would require dealers to dwell on the past and, frankly, that's just not in their nature.
"I think dealers want to hear first and foremost, where do we stand on production and supply constraints," said Charlie Hall, new chairman of the Volkswagen National Dealer Advisory Council. "There's a bold sales projection and goal that's been put out there, and that all revolves around production. Are they going to be able to produce as many vehicles as they think they can?"
Last year, VW sold 301,069 vehicles in the U.S., down 20 percent from 2021. Its crossover lineup — representing 83 percent of the brand's total sales — was down 9 percent overall, despite a 23 percent jump in sales from the ID4 electric compact crossover. The reason for both — production.
Additional supplies of microchips, promised to North America by Wolfsburg after Russia's invasion of Ukraine threatened supplies of other components, including wire harnesses, never materialized because supplier production in Ukraine continued, allowing Volkswagen Group factories in Europe to keep running. That left VW dealers unable to meet demand for most of their products.
Meanwhile, localized production of the ID4 in Chattanooga, Tenn., began over the summer, and dealers started receiving the electric vehicle in the fourth quarter in large enough quantities to boost its segment share.
"We remain on track with a solid business performance, and our business will get stronger in 2023," Andrew Savvas, VW of America's head of sales and marketing, told Automotive News. "We do expect to grow in 2023 as the supply situation improves, and we're looking forward to quite a good positive growth year on the back of a full year of ID4 coming out of Chattanooga."
Still, Savvas acknowledged that production constraints hampered VW in 2022, just as they did the rest of the industry, and gave the automaker dreaming of a return to 5 percent market share in the U.S. its worst annual performance since 2010.
"We could have sold a lot more cars" if dealers had them to sell, Savvas said. "I'm optimistic that demand will still stay strong; employment is still strong in the U.S. and there is a lot of pent-up demand. We still have some big order banks, ID4 in particular, and we hear from our dealer network that there is still demand out there for our products, and if we gave them more cars, they would sell them."
The meeting marks the first grand in-person audience with dealers for new VW of America CEO Pablo Di Si, who has been visiting dealers and going to regional meetings since succeeding Scott Keogh on Sept. 1. "I think the dealers will be looking forward to hearing from Pablo himself," Hall said.
Dealers have a message they want Di Si to take back to his bosses in Wolfsburg about the Scout brand, Hall said. The German automaker revived the brand last year. Keogh is now CEO of Scout.
"We want Scout vehicles to be in our VW showrooms," Hall told Automotive News. "The dealers are going to tell [VW of America management] that we can execute the Scout vision. And we have an idea of what that is, because we share that same vision. We've been looking for that kind of product to be in our showroom for a long time. It dovetails perfectly with the rest of our lineup."
But Savvas said VW brand leaders, who can't speak for Scout management, may have to counsel dealers to "focus on what they can control," which is their own brand.
"What's within our control is good," Savvas said, "and it's getting better, and that will make our dealer network stronger."
