Volkswagen mentions dealers’ 14 years of terrible sales

If you’re wondering what happens when a dealer hasn’t been able to achieve its goals for more than a decade, this is a juicy example. Volkswagen is trying to terminate a dealer agreement with Prestige imports in Pleasantville, New York, claiming that the dealer has been underperforming for more than a decade. To cut the wires, Volkswagen has taken the dealer to court, accusing them of not selling enough cars to breach the contract.

The dealer signed a Volkswagen contract as early as 1998 and agreed to comply with the company’s operating standards and annual sales goals. According to a lawsuit filed in the U.S. District Court for the Southern District of New York, prestige imports have not met their sales targets. In fact, since 2011, dealerships have only made more than half of their expected sales.

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“Reputation has long been unable to effectively represent the Volkswagen brand and there is no effective excuse for its poor performance,” Volkswagen claimed in the complaint, adding that the company’s patience is “final.”

The prestige importer also operates the Subaru franchise. Volkswagen noted that it first sent a insufficient letter to dealers in October 2010 and then issued a default notice in August 2011 due to its ongoing poor performance. Despite these warnings, Volkswagen continues to offer expansion. In 2024, they issued another default notice, setting prestige for the April 1 deadline to “correct their sales performance obligations.”

Although this deadline is extended to September 30, 2024, Volkswagen said Prestige has not taken the necessary steps to get back on track. According to the lawsuit, reputation is one of Volkswagen’s worst performers in New York State and surrounding areas.

“Despite Vwoa’s continued efforts over the years, Prestige still hasn’t reached satisfactory sales levels and remains one of the worst performing dealers in New York State and the region,” Volkswagen said. “Prestige failed to implement VWOA’s recommendations to create effective services to sales processes, improved online presence and consistent digital marketing campaigns. Indeed, Prestige reported spending $0 on advertising programs for new Volkswagen sales in 2024.”

The lawsuit also states that customers living near Prestige choose to buy mass products from other nearby dealers, indicating that the dealer “failed to attract and retain customers effectively”, Automotive News Report.