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Cover feature: VW puts dealer relationships on a steady footing

One year ago, Volkswagen MD Paul Willis stood in front of his retail network and told them that he was embarrassed by their lack of profits during the previous 12 months.

Few dealers disagreed with that judgment. They had spent a year under immense pressure and complaints to AM on dissatisfaction hit record levels. This was underlined by the Sewells dealer attitude survey, which saw Volkswagen drop from 16th to 22nd, way behind group stable mates Audi, Škoda and Seat. It ranked 27th on manufacturer relationships, 31st on franchise/operational standards and 34th (bottom) on audit processes.

The main grievances included criticisms about Volkswagen staff deliberately chipping away at CSI scores to avoid paying bonuses, an inadequate appeals process, dictating the type of training dealers needed and a level of micro-management that saw costly consultants brought into the business.

Dealers were also unhappy with what they felt was poor representation by the dealer council. One senior retail chief executive told AM last year: “Before VW tampered with our business we took £500,000-750,000 profit. Now we are in loss and VW has taken the money.”

Willis is tackling all the criticisms head on. In a forthright and honest self-appraisal, he says: “In January 2006 I told our retailers there had been improvements in our performance indicators and sales but I was embarrassed that their profits weren’t improving. It was a disgrace. I said I would do everything to help them improve.

  • This feature continues in the March 9 issue of AM. To subscribe to AM magazine. Click here or call 01733 468659. A subscription to AM can only benefit your business.

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