The National Auto Dealers Association, the expansive trade association that represents car dealers across the U.S., criticized Volkswagen AG’s decision to push out Volkswagen of America Chief Executive Officer Michael Horn.
NADA, which usually limits its criticism of carmakers to attacking any deviation from the franchise dealer business model, said Horn’s departure in the middle of the emission scandal is bound to make the situation worse not better.
Horn resigned last week in what was described as a “mutual agreement.” It was effective immediately.
The statement from NADA also indicated the discontent among VW’s dealers in the U.S., who have been pressured in recent years to make significant new investment in facilities and real estate, is continuing to increase.
The statement also notes that VW dealers around the U.S. fear the company’s German management have no clue on how to resolve the problems created by the emission cheating scandal.
(Horn latest casualty in VW diesel scandal. For more, Click Here.)
“(The) departure of Volkswagen of America’s President and CEO Michael Horn is a significant blow to the VW dealer network, which has been operating in crisis mode for more than six months. What’s most regrettable about Mr. Horn’s departure is that it leaves more questions than answers for the 652 Volkswagen dealers across the U.S.,” the statement said.
“The impact of the diesel defeat-device scandal has not only negatively impacted dealership profitability due to a limitation of product available to sell, but, more significantly, has severely damaged the reputation of the brand in the eyes of consumers – damage we all know could take many years to overcome,” the statement said.
NADA also addressed concerned voiced by some dealers that VW was preparing to scrap plans to build the Volkswagen brand’s presence in the U.S. VW has denied it has any such plans though retreating could potentially reduce the company’s legal exposure to both federal regulators in the U.S. and the State of California.
The organization stated that a critical step in this recovery will be for VW to honor the future product plan that Horn and VW dealers fought vigorously for in Wolfsburg. Volkswagen’s U.S. dealers have made significant investments in buildings, technology and people during the past several years based these product commitments that we hope are not in jeopardy.
“NADA calls on Volkswagen AG CEO Matthias Mueller, and brand chief Herbert Diess to meet personally with their dealers at the upcoming Volkswagen franchise meeting during the NADA Convention in Las Vegas. VW dealers deserve to hear first-hand from the company about its vision for the future of Volkswagen in the United States,” the statement.
(VW CEO alerted to diesel problem in early 2014, reports say. Click Here for more.)
Horn, a favorite of the American dealers, resigned last week after 25 years with the company. He was the latest in a growing list of casualties from the emission scandal, which has been chewing into the German automaker’s executive ranks. Horn was replaced by an executive VW hired away from BMW.
HIs days had been numbered ever since Volkswagen’s Board of Supervisors went outside the company earlier this year and brought in a former BMW executive to run VW’s operations in North America.
Horn had been the face of Volkswagen in Washington D.C. since the U.S. Environmental Protection Agency disclosed it uncovered evidence that the German automaker deliberately cheated on emission tests.
VW has promised to cooperate with the EPA’s ongoing probe it has also resisted any admission of wrongdoing in the scandal over VW’s cheating on emission test broke into the open last September. Replacing Horn could make it easier for Volkswagen to negotiate a settlement with the EPA. So far, a negotiated settlement has eluded Volkswagen.
In addition, Horn was in charge as VOA’s sales in the United States went into a freefall during the past two years. The drop in sales has been exacerbated by the EPA’s refusal to certify 2016 Volkswagen models with diesel engines because of the cheating scandal.
(U.S. auto sales surge – but VW takes another tumble. Click Here for February’s results.)
Volkswagen of America also has been slow to react to a market shift that has seen American move from passenger cars to trucks and utility vehicles.