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Dealers Say Decision for Scout to Skip Dealers and Sell Directly to Consumers Is ‘Misguided’

Updated: 26-10-2024, 06.47 PM

It would be easy to think that Scout’s claims that it’s independent from VW are mostly just marketing fluff. In reality, it’s separate enough that it’s going to sell directly to consumers and eschew traditional dealer networks. That’s great for people who want to buy the new Scout Terra or Traveler but VW dealers aren’t so stoked.

First, let’s be clear about what Scout said at its launch event yesterday.

“From reservations and vehicle sales to delivery and service, Scout Motors supports the consumer directly. One company, one app, one login, one experience. From the start, customers will know what they are paying and can expect full price transparency. Vehicle purchase transactions will be completed in minutes,” it says.

That is huge news that sincerely separates Scout from VW in a big way. Based on everything we know about the Traveler and Terra, these are two vehicles that should sell very well. What can sometimes dampen customer interest and demand is dealer markups. By selling directly to consumers, Scout is going to completely avoid that pitfall.

Of course, dealers hoping to make a killing off of this new brand aren’t happy about it.

“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,” said National Automobile Dealers Association CEO Mike Stanton to CNBC.

“Assuming they take this other path, let’s face it, there’s going to be challenges and problems for them virtually everywhere across the country. My counterparts around the country are not just going to roll over,” said Automotive Trade Association Executives’ 2024 chairman John Devlin to Auto News.“

Devlin is very likely right. Lucid, Tesla, Rivian, and other direct-to-consumer automakers face countless challenges across the nation. Dealers like to be the middleman and cutting them out isn’t always easy. Clearly, brands like those mentioned have mostly found ways around the laws lobbied for by dealers. If Scout manages to do the same is yet to be seen though.