The automotive industry is buzzing with concerns as car dealers express their apprehension towards the potential sale of upcoming electric vehicles (EVs) from Sony Honda Mobility and Volkswagen (VW) outside of the traditional dealer franchise system. These dealers view the protection of this sales model as paramount to their business model, which often involves charging additional fees and financing for extended terms on top of the vehicle’s price. The Automotive Trade Association Executives have voiced their concerns in a full-page advertisement published in the April 15 edition of Automotive News, urging both automakers to stick to the established franchise system. This advertisement, backed by franchise associations across the country, serves as a warning to Sony and VW, reminding them that state laws generally prohibit manufacturers from selling new vehicles directly without utilizing dealers. The group also highlights the benefits of the franchise sales model before threatening legal action if Sony and VW proceed with their plans to circumvent dealers. Dealers and the National Automobile Dealers Association (NADA) have been on edge for the past two years, eagerly awaiting details on how these EVs will be sold. VW’s Scout EV is not scheduled to begin production until 2026, while Sony’s Afeela EV is set to enter production next year, with sales commencing in 2026. Despite this timeline, dealers are expressing concerns, prompting John Devlin, the Automotive Trade Association Executives’ 2024 chairman and CEO of the Pennsylvania Automotive Association, to state, “After two years of asking and getting nothing, frustration is very high.” He further emphasized that any attempt by these automakers to sell vehicles directly would be met with strong resistance. Geoffrey Pohanka, chairman of Pohanka Automotive Group and 2023 chairman of NADA, echoed these sentiments, indicating that if Afeela and Scout bypassed franchised dealers, they would face legal challenges from state and metro trade associations with the full support of NADA. Neither Sony nor VW has commented on this situation, and the only information provided by VW regarding the Scout’s sales strategy came from Andrew Savvas, head of sales and marketing at VW of America, in late 2022. In a communication to dealers, he stated that Scout would operate as a separate brand, and VW dealers would have no involvement in its products.
Car Dealers Express Concerns over Sales Model for Sony Honda Mobility and VW EVs
