The Volkswagen automobile group is attempting to pay unprofitable car dealers in Germany to stop selling VW cars, a source alleges.

The unidentified source alleges the German automaker is trying to buy out the contracts of numerous dealers in Germany that have been losing money and hurting the company's profit margin, Automotive News Europe said in a story published in its Monday issue.

The source alleges Volkswagen is attempting to limit its future sales group to only those dealers who sell at least 1,000 vehicles annually.

Automobile News Europe said the current annual sales average for the German dealers is between 300 and 400 vehicles.

Detlef Wittig did , VW head of sales and marketing, confirmed the automobile group was implementing a restructuring plan due to financial losses in the German dealer network.

There is little future for them, especially now that the (new-car) market is getting worse, Wittig said of such struggling dealers. The German market has to have a shake-up.

Wittig told Automobile News his company would offer supportive measures to some German dealers including less expensive demonstration vehicles.

Copyright 2008 by United Press International


Publication date: 12 October 2008   

Source: UPI-1-20081012-13271600-bc-germany-vw.xml

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