Fourteen California Volkswagen dealers have filed protests at the state’s New Motor Vehicle Board challenging Volkswagen and its Scout Motors subsidiary over plans to sell Scout vehicles directly to consumers, opening a second legal front against the automaker’s direct-to-consumer strategy.
The California New Car Dealers Association announced the filings May 1. The protests allege Volkswagen is circumventing state franchise law by positioning Scout as a separate brand while the two companies remain under common corporate ownership and Scout vehicles will be built in Volkswagen-owned factories. Volkswagen has argued that Scout operates as an independent company.
The dispute carries implications beyond
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