Volkswagen is taking steps to ensure U.S. dealers survive the fallout from the company’s emissions scandal, which has slammed sales.
Volkswagen U.S. CEO Michael Horn told reporters at the Detroit auto show that the company has delivered “customer satisfaction” bonuses and “various other programs” to bolster dealers during this tumultuous period, but he declined to label the moves as subsidies, saying the automaker is “paying for performance.”
“We are committed to the dealers and we will get them the right things to get them into 2017,” Horn said.
Horn’s statement echoed Volkswagen global brand chairman Herbert Diess’ pledge to give dealers “all the support they need,” describing the U.S. market as crucial to the company’s future.
Dealers have suffered deeply in the wake of the scandal, which broke in September, when VW admitted that it had rigged up to 11 million diesel vehicles worldwide with software that cheated emissions regulations.
U.S. sales fell 11.3% in the fourth quarter, compared to a year earlier, even as the overall auto industry capped off a record year.
Horn insisted that dealers have taken a turn for the better due to a relentless focus on reducing unnecessary costs and increasing performance incentives. He said 60% of Volkswagen U.S. dealers were profitable in 2015, up from 45% in 2014.
“I’m not concerned that the dealers will not survive this because, as we said, we’ve really significantly increased the dealer profitability,” Horn said.