Volkswagen’s plan to revive the Scout brand has drawn the wrath of the National Automobile Dealers Association.

Last week, Reuters reported the VW-backed Scout Motors company will sell its electric SUV and pickup truck directly to consumers rather than through dealers, quoting CEO Scott Keogh as saying he expects Scout to have some three dozen retail centers nationwide when sales are scheduled to begin in 2027, with plans to expand to 100.

NADA’s reaction was swift and disapproving.

“VW AG’s decision to attempt to sell Scout vehicles direct to consumers and compete with its U.S. dealer partners is disappointing and misguided, and it will be challenged,” NADA president and CEO Mike Stanton said in a statement.

“Unfortunately, it’s also not terribly surprising, as VW AG CEO Oliver Blume and Scout CEO Scott Keogh have avoided engaging with or even responding to NADA for months.”

Stanton said the association is prepared to take legal action to stop the company’s decision to cut dealers out of its sales model.

“NADA and state dealer associations fully stand behind VW and Audi dealers that are being left behind by this decision,” he said, “and are prepared and will challenge this and all attempts to sell direct in courthouses and statehouses across the country.”

VW announced the new Scout brand in 2022, creating an independent company based in the U.S. to manufacture electric off-road-type vehicles. Earlier this year, Scout broke ground on its $2 billion plant in Blythewood, S.C., near the state capital of Columbia.

The brand is an homage to one of America’s first SUVs, the International Scout, which was sold by International Harvester from 1960 to 1980. Volkswagen Group acquired the company’s successor, Navistar, in 2021.

Last week Scout unveiled its first models — the Traveler SUV and Terra pickup — at an event in Nashville. The vehicles will come in electric and plug-in hybrid versions.

How those vehicles will be sold has become a matter of contention.

Stanton said the franchise model is a better alternative than Scout’s proposed direct-sale method.

“Since VW AG signaled the re-emergence of the Scout brand in the U.S., NADA has communicated very clearly on numerous occasions to its leadership that the franchise system is the best and most efficient way to deliver the customer experience today’s marketplace demands,” he said.

“This was recently reinforced by an independent study of the cost and value of new-car distribution by the consulting firm, Oliver Wyman, which concluded that utilizing franchise dealers is more cost-effective than a direct sales channel and provides tremendous value to automakers and consumers alike.”

Victory scores its 21st California dealership

Victory Automotive Group added another California location with the acquisition of San Leandro Mazda in San Leandro from Harvey Auto Group, according to Tim Lamb Group, which brokered the sale.

The dealership, which has been renamed Victory Mazda San Leandro, is Victory’s 21st in California and 53rd nationally, representing 11 states.

The dealership’s showroom is a former industrial facility that was converted when it was purchased by Harvey Auto Group in 2018. After renovation, the Mazda store opened in December 2020. It includes the 13,000-square foot showroom and a 14-bay parts and service center.

Ken Harvey founded Harvey Auto Group with a motorcycle shop in 1954. The family-owned business currently operates of four Honda stores and two Mazda stores in Northern California.

Michigan-based Victory Automotive Group, led by Jeff Cappo and sons Eric and Mike, operates 53 locations in 11 states, reporting some 50,000 new and used sales and revenues of $2.3 billion in 2023.