Since the U.S. Environmental Protection Agency and the California Air Resources Board found in September that Volkswagen cheated on emissions requirements, most speculation has focused on the wide scale impact on the German automaker, but local dealers also could be affected by the scandal.
Volkswagen operates three dealerships in Westchester County, three in Fairfield County, and another four throughout the Hudson Valley.
Erik Slotnick, business manager for Palisades Volkswagen in Nyack, declined comment.
Managers at Lash Volkswagen of White Plains; Prestige Imports in Pleasantville; Mohegan Lake Motors, Inc.; Compass Volkswagen in Middletown; Volkswagen of Kingston; Hudson Valley Volkswagen in Wappingers Falls; Danbury Volkswagen; and Curran Volkswagen, Inc. in Stratford could not be reached for comment last week.
But Woody Woodward, general manager of Prestige Volkswagen in Stamford, said business has not yet been slowed by the scandal. Woodward said new car sales are still on pace to jump 40 percent for the year. He”™s been in the auto business for more than 35 years at various dealerships, he said, and has experienced multiple scandals, including issues with Audi acceleration, Suzuki rollovers and General Motors bankruptcies.
“So, yeah, I”™ve been through a lot of it,” Woodward said. “My dealings with Volkswagen in the past and present is that they”™ll step up to the plate for everyone involved — the customers and the dealers.”
“We are customers ourselves. We buy parts and services from them. Several of our people own VWs s. We have faith in the products.”
Woodward said the overwhelming amount of his customers want to keep their Volkswagen cars and have no intention of switching to another manufacturer. Still, there a select few who have said they want out of their VW, and Woodward said he hasn”™t tried to persuade them otherwise.
Volkswagen admitted in September that millions of its four-cylinder diesel cars were fitted with technology that cheated on emissions tests. The company said roughly 11 million cars are affected worldwide, though experts have said just 3 percent are in the United States. The majority of the affected vehicles are in Europe.
Bob Vail, president of the Vail Auto Group in Bedford Hills and chairman of the Greater New York Automobile Dealers Association, said he has been in contact with several area VW dealers, who said roughly 6 percent of sales involve cars listed in the emissions scandal report.
“VW is such a reputable brand and they have such a loyal customer base, so I don”™t think in the long run it”™s going to have a tremendous effect,” Vail said, adding the GNYADA board has not yet formally discussed the emissions scandal.
According to GNYADA, which represents the auto industry in Westchester County as well as Rockland, Dutchess, Putnam, Orange, Nassau and Suffolk counties and New York City, new car sales for the metropolitan New York area increased for the fifth consecutive year in 2014. Recent reports show Volkswagen of America, Inc., a subsidiary of Volkswagen Group of America, Inc. based in Herndon, Va., saw U.S. sales drop 25 percent in November.
“Volkswagen Group, on the heels of another diesel issue involving its higher-end models, appears to have challenging November,” said Tim Fleming, and analyst for Kelley Blue Book Co., the California auto research company. “Following an incentive-heavy October that cleared out many 2015 gas-powered models, a shorter supply of vehicles and expanded stop-sales on diesel models will contribute to a slower month of sales.”
Paul Bracken, a professor of management and political science at Yale University”™s School of Management, said he expected the scandal to hit the German automaker hard in the U.S.
“Customers will demand bargains, suppliers will be squeezed on costs and sales people will be under the gun to make larger profits to pay for the huge fines that are coming,” Bracken said. “Volkswagen won”™t be the best place to work, and I think they”™ll lose their best salespeople.”
Bracken sees the scandal as a time for Volkswagen “to think through their overall to strategy, and not just turn the problem over their legal team.” He expected a host of lawsuits to follow.
Forty-eight attorneys general, including New York Attorney General Eric T. Schneiderman, announced last month a joint investigation into the import and sale of VW cars. Volskwagen also sells Audi and Porsche brand vehicles.
In November, the company announced it would provide 2.0L 4-cylinder TDI vehicle owners with a “Goodwill package” containing a $500 Volkswagen prepaid credit card, a $500 Volkswagen dealership card and no-charge roadside assistance for three years. It has recalled its 4-cylinder diesel engine cars at the center of the scandal, as well as some six-cylinder models.
“We are working tirelessly to develop an approved remedy for affected vehicles,” said Michael Horn, president and CEO of Volkswagen Group of America, at the time of the announcement. “In the meantime, we are providing this Goodwill Package as a step to regaining our customers”™ trust.”
Volkswagen CEO Martin Winterkorn, who has since resigned, said in a September statement that the company ordered an external investigation to “establish all of the facts of this case.”
