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https://www.autonews.com/volkswagen/scout/an-california-dealer-association-scout-letter/
December 23, 2024
The Calfornia New Car Dealers Association has demanded that Scout Motors / VW Group stop taking deposits for the Scout Traveler and Terra by claiming that it violates amended state law that prohibits direct vehicle sales to consumers.
On Dec. 20 the association sent a letter to the head lawyers at Scout Motors and VW Group that said the two companies' plan to sell Scout vehicles direct to consumers "wrongfully cuts new and existing VW dealers out of an opportunity" and directly violates a section of California's law covering new-vehicle sales.
Updated with the cease and desist letter from the Calfornia New Car Dealers Association (CNCDA) -- cease-and-desist letter:
“Under Vehicle Code section 11713.3(o), automobile manufacturers and their affiliates are forbidden from competing with their own vehicle franchisees. Scout is an affiliate of VW under California law. Vehicle Code section 11713.3(z) defines ‘affiliate’ as ‘a person who directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another person.’ [emphasis added by CNCDA]. Since as early as 2022, VW has been directly and substantively involved in Scout’s development and revitalization of its vehicles, including VW’s investment of billions of dollars into a Scout production plant in South Carolina.”