Volkswagen of America Inc. is seeking permission to close a Pleasantville VW dealer that it claims has produced subpar sales for more than a decade.
VWA, of Reston, Virginia, accused Prestige Imports of failing to make meaningful improvements or required investments to sell more cars, in a complaint filed on Feb. 18 in U.S. District Court, White Plains.
“Enough is enough,” the complaint states. “Prestige’s performance has been exceedingly poor, ranking among the very worst Volkswagen dealers not only in New York State, but in the entire northeast region of the United States.”
Prestige is led by Anthony Borelli, of Chappaqua, according to a state business record.
VWA, a subsidiary of the German carmaker, distributes new cars to authorized dealers in the U.S. It traces its relationship with Prestige to a 1998 dealer agreement that requires Prestige to meet certain performance standards.
VW dealers are measured by an index that compares new vehicle sales to expected sales in their markets. The measurements account for unique conditions in each market, such as consumer preferences, as well as broader market factors, such as economic slowdowns.
Since 2011, VWA claims, Prestige has made barely half of its expected sales, resulting in about 1,500 fewer new car sales and “leaving local customers without a competent Volkswagen dealer to address their needs.”
Most Volkswagens sold in Prestige’s market are sold by other dealers, the complaint states, indicating that customers would rather not patronize Prestige.
VWA says it has repeatedly tried to work with Prestige to boost sales, beginning in 2010, but Prestige continued to fall short of performance targets.
VWA notified Prestige in May 2023 that it was in default of the dealer agreement, according to the complaint, and offered a final chance to improve sales and avoid termination. VWA says it regularly met with Prestige for 17 months, to identify problems and encourage action.
Prestige allegedly ignored VWA’s suggestions, like developing a digital marketing campaign. Instead, Prestige reported spending $0 on advertising for new car sale in 2024.
“Prestige’s dismal sales performance and failure to make required efforts to cure its deficiencies,” the complaint states, “constitute material breaches of its dealer agreement.”
VWA is asking the court to declare that it has the right to terminate the dealer agreement.
Prestige did not reply to a message asking for its side of the story.
