VW Files Lawsuit Against Dealer for 14 Years of Poor Sales | Carscoops

      The automaker states that the dealer is among the least successful showrooms in New York State.

      Volkswagen asserts that Prestige Imports has routinely failed to meet its sales targets for more than ten years.

      Since 2011, the dealership has reportedly achieved just over 50% of its necessary sales volume.

      VW first issued a deficiency letter to the New York dealer in October 2010, and again in 2024.

      If you've ever been curious about the consequences of a dealership underperforming for over a decade, here’s a compelling example. Volkswagen of America is pursuing the termination of its dealer agreement with Prestige Imports in Pleasantville, New York, alleging that the dealership has been underperforming for well over ten years. In an effort to sever ties, VW has taken the dealer to court, accusing them of violating the contract by not selling enough vehicles.

      The dealer entered into a VW agreement in 1998, committing to adhere to the automaker’s operational standards and annual sales goals. According to a lawsuit lodged in the U.S. District Court for the Southern District of New York, Prestige Imports has not met its sales goals. In fact, the dealership has managed to achieve only just over half of its expected sales since 2011.

      In its lawsuit, VW claims, “Prestige has long failed to effectively represent the Volkswagen brand and has no valid justification for its poor performance,” asserting that the company's patience “has justifiably come to an end.”

      Prestige Imports also functions as a Subaru franchise. VW reports that it first issued a deficiency letter to the dealer in October 2010, followed by a notice of default in August 2011 due to ongoing underperformance. Despite these notifications, VW continued to provide extensions. In 2024, they sent another notice of default, establishing an April 1 deadline for Prestige to “address breaches of its sales performance obligations.”

      This deadline was extended until September 30, 2024, but VW states that Prestige has not taken the necessary actions to improve. According to the lawsuit, Prestige stands as one of VW’s least performing dealerships in both New York State and the nearby area.

      “Despite VWoA’s sustained efforts over many years, Prestige continued to fail to achieve an acceptable level of sales performance and remains one of the worst-performing dealers in New York State and the region,” VW states. “Prestige has not adopted VWoA’s recommendations to establish an effective service-to-sales process, enhance its online presence, or undertake a focused digital marketing campaign. In fact, Prestige reported no expenditure on advertising initiatives for new Volkswagen vehicle sales in 2024.”

      The lawsuit also notes that customers living near Prestige are opting to purchase VW products from other local dealerships, indicating that the dealer “is failing to effectively attract and retain customers,” according to Auto News.