A New York Volkswagen Dealer Is Facing Litigation Over Abysmal Sales Numbers

Automakers sometimes argue with their franchise dealers over markups, EVs, and other issues, but one Volkswagen store is facing a lawsuit from the mothership over slow sales. The OEM said that the New York-based Prestige Imports dealership’s failings have cost it around 1,500 sales over the last 14 years and noted that the store’s leadership hasn’t done much to improve the situation.

Volkswagen took notice of Prestige’s struggles in 2010 and sent a “Notice of Default” the year after. The automaker set a goal for the store to improve performance by early 2012 and then extended the deadline until the end of 2013, but Prestige could never get its act together.

VW’s partnership with the store continued for almost 10 more years until 2023, when the automaker said it was unsatisfied with Prestige’s “unacceptable results. It sent another default notice, but the dealer reportedly ignored its “suggestions for improvement and offers of assistance.”

Even after taking all that flak from VW, Prestige reportedly spent nothing on advertising last year. We don’t know how much money the automaker could see out of the suit, if any, but if successful, it will end its relationship with Prestige. VW’s complaint noted that the dealer’s “longstanding poor sales performance not only constitutes a material breach of its fundamental contractual obligations, but also provides clear “due cause” for termination under the applicable New York statute governing termination of motor vehicle dealership franchise.”

[Images: Volkswagen]

Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.