VW’s direct sales model for Scout Motors to be challenged by US dealers

Volkswagen’s Scout Motors is looking to enter the electric vehicle market using a sales strategy that has proven very effective for industry leaders like Tesla. On Thursday, Scout noted that it is planning to adopt a direct sales model instead of using a conventional dealer network. 

With such a sales model, Scout would be directly selling and servicing customer vehicles. The company also pledged full transparency on vehicle pricing, as noted in a CNBC report. But while Scout’s decision to adopt a direct sales model is understandable, it also attracted the ire of groups representing U.S. auto dealers.

On Friday, the National Automobile Dealers Association (NADA) noted that they are looking to challenge Volkswagen’s decision to sell Scout’s vehicles directly to customers. As per the dealers association, it will “challenge this and all attempts to sell direct in courthouses and statehouses across the country.” 

NADA CEO Mike Stanton noted that Volkswagen’s decision to “attempt to sell Scout vehicles direct to consumers and compete with its U.S. dealer partners is disappointing and misguided, and it will be challenged.”

Scout Motors CEO Scott Keogh, for his part, previously noted that the brand is looking to have about three dozen U.S. retail centers when sales of the Traveler and Terra start in 2027. These retail centers are expected to grow to 100 later on. “I think it’s critical moving into the future in unstable environments to control your customer, control your margin, control your operational excellence,” Keogh noted. 

Scout is looking to produce up to 200,000 Travelers and Terras per year beginning in 2027 from its South Carolina plant, which is still being built. The Scout Traveler SUV and the Scout Terra pickup truck will be offered as all-electric vehicles, as well as hybrids with a range extender. 

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