CNCDA Files Lawsuit Against Volkswagen and Scout Motors for Violation of California Franchise Laws
Contact: Autumn Heacox, Director of Communications & Marketing: aheacox@cncda.org, (916) 441-2599 x105
Scout Motors Bypassing Dealer Partners
SACRAMENTO, CA, April 22, 2025— Today, the California New Car Dealers Association (CNCDA) filed a lawsuit in San Diego County Superior Court against Volkswagen and its affiliate, Scout Motors, for deliberately violating California’s franchise laws. The lawsuit asserts that Volkswagen is illegally competing with its dealer partners through its affiliate, Scout Motors.
Volkswagen and Scout Motors are operating in direct violation of California Assembly Bill 473, a 2023 law that prohibits automakers from using affiliated brands to compete with their own franchised dealers. Despite admitting to legislative leaders that AB 473 would cut off its ability to sell directly to consumers, Volkswagen, via Scout Motors, has taken deposits and is marketing Scout-branded vehicles to California consumers.
“While CNCDA represents 45 Volkswagen dealerships in California, this lawsuit sends a message to every automaker,” said Brian Maas, CNCDA President. “VW dealers would welcome the opportunity to sell Scout trucks and SUVs, but their manufacturer business partner is denying them that opportunity, in direct violation of California law. Volkswagen can’t pick and choose which vehicles to sell on its own or through its franchised dealer network, reserving the most profitable or desirable vehicles for itself. Illegal competition will harm not only dealers but also the communities and car buyers that they serve. That is why the Legislature unanimously approved this important law.”
The lawsuit alleges unfair competition and false advertising, and CNCDA is seeking to immediately stop Scout Motors’ illegal direct sales, as well as civil penalties that could exceed $35 million.
California’s franchised dealers are key economic drivers, employing over 135,000 Californians and generating more than $8 billion in tax revenue for state and local governments. They also donated almost $71 million to charitable organizations in 2024 alone. CNCDA is committed to protecting the laws that ensure fair competition and a level playing field for all.
For over 100 years, the California New Car Dealers Association has represented California’s franchised new car and truck dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles and provide automotive products, parts, services, and repairs.
In 2024, California’s franchised new car dealers sold more than 1.85 million new and used cars and trucks, employed more than 138,478 people, paid $8.83 billion in sales tax, and donated $70.75 million to charitable and civic organizations. CNCDA is the Nation’s largest state association of franchised automotive dealers, with nearly 1,200 members, and provides legal compliance and legislative, regulatory, and legal advocacy.
California New Car Dealers Association Releases Q1 2025 Auto Outlook Report
Contact: Autumn Heacox, Director of Communications & Marketing: aheacox@cncda.org, (916) 441-2599 x105
Q1 2025 CA Auto Outlook Report: Tesla Tumbles with Sixth Straight Quarterly Decline; Slows CA’s ZEV Market Overall Market (and Hybrids) Make Strides
Statewide Impacts Tesla’s troubles continue to worsen as Californians are giving the cold shoulder to the direct-to-consumer automaker (and controversial owner, Elon Musk). Registrations show a massive decline of 15.1 percent through March vs. this time last year. A year and a half of continuous quarterly declines proves this downward trajectory for Tesla is a lasting trend. The company’s market share also dropped by 11.6 percent at the end of Q1, now holding less than half of the California Zero Emission Vehicle (ZEV) market for the year.
Tesla’s shrinking sales are dragging down the state’s zero-emission vehicle sales momentum. California posted a second quarterly decline in ZEV registrations, holding just 20.8 percent of the market share (down from 22 percent in 2024).
The state’s ZEV market share would need to increase by 14.2 share points to meet the California Air Resources Board’s Advanced Clean Cars II mandated level of 35 percent for 2026 model year vehicles (representing a 68 percent increase in ZEV registrations). The state’s franchised new car and truck dealers begin selling 2026 model year vehicles in a matter of weeks.
“Dealers sell what customers want to buy. No mandate can force consumers to choose otherwise. Although the manufacturers we represent are increasing EV sales in California, with the substantial decline in Tesla sales, EV market penetration is largely flat. This puts us well short of EV sales mandates that take effect this year,” said Robb Hernandez, CNCDA’s Chairman and President of Camino Real Chevrolet.
Key Highlights Still, the California sun is shining on the automotive market. Overall, new vehicle registrations among all brands showed a massive 8.3 percent growth from this time last year. A promising 463,114 vehicles were registered in the Golden State last quarter. Another bright light: California’s hybrid market is soaring. Hybrids now hold 17.9 percent of the market share, coming closer than ever to reaching the state’s ZEV numbers.
However, the forecast is cloudy with uncertain predictions for the remainder of 2025; registrations are now expected to dip 2.3 percent to 1.71 million for the full year. Looming trade policy changes have thrown a wrench into the outlook. A rush of buying in March and April, likely ahead of anticipated tariffs, may be short-lived if vehicle prices spike.
Brand Market Share and Summary Among all powertrains and brands, Toyota tops California, with 76,625 registrations in Q1, holding 16.5 percent of California’s market share. Honda jumped up a spot this quarter to take 10.8 percent of the market share. And Tesla came in third, with 9.1 share of California’s market, losing 2.6 percent from this time last year.
Toyota also leads California’s light truck market with Ford and Honda in second and third.
Several brands racing ahead with registrations improving by 30 percent (or more) YTD include: Buick, Mitsubishi, Genesis, Chrysler, Cadillac, Land Rover, Nissan, and Hyundai.
Model Segment Rankings California’s best sellers in the primary segments so far in 2025 are the Toyota Camry, Tesla Model 3, Honda Civic, Toyota Tacoma, Ford F-Series, Toyota RAV4, Honda Prologue (which also took third place in the alternative powertrain market), and the Lexus RX.
The top three passenger cars sold this quarter were the Tesla Model 3 (11.6 percent of share), the Toyota Camry (holding 11.5 percent) and the Honda Civic with 10.7 percent of California’s market share. The top three light trucks sold were the Tesla Model Y (6.8 percent share), the Toyota RAV4 (4.9 percent share), and the Honda CR-V (4 percent share).
Regional Variances Northern California passenger car sales were up .8 percent, and light trucks were way up with an 8.4 percent increase in registrations. BEVs account for 24.6 percent of Northern California’s market share. In Southern California, passenger car registrations were down 3.1 percent, while light trucks grew 7.1 percent, with BEVs taking a 23 percent share of the market.
California Auto Outlook Quarterly is produced for CNCDA by Auto Outlook, Inc., an independent research company that analyzes statewide and regional automotive markets. When reporting these auto industry trends, please acknowledge the Data Source: Experian Automotive.
The report provides comprehensive information on California’s new vehicle market, including annual trends, a two-year perspective, vehicle powertrain dashboard, segment watch, the top five models in each segment, brand scoreboards, regional comparisons, and more. Visit www.cncda.org.
About CNCDA
For over 100 years, the California New Car Dealers Association has represented California’s franchised new car and truck dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles and provide automotive products, parts, services, and repairs.
In 2024, California’s franchised new car dealers sold more than 1.85 million new and used cars and trucks, employed more than 138,478 people, paid $8.83 billion in sales tax, and donated $70.75 million to charitable and civic organizations. CNCDA is the Nation’s largest state association of franchised automotive dealers, with nearly 1,200 members, and provides legal compliance and legislative, regulatory, and legal advocacy.
2025 Dealer Day Recap and Photos
SACRAMENTO, CA – The California New Car Dealers Association would like to express our heartfelt appreciation to all who attended Dealer Day 2025 in Sacramento. We appreciate the 200+ dealers and 150+ sponsors, vendors, and partners who attended and gave their time to advocate for the future of California’s Automotive Industry. We hope you will join us again for Dealer Day 2026.
Additionally, we want to sincerely thank our sponsor partners who helped make this event possible for our membership. Thank you again for your dedication to our industry and cause. We hope to see you all next year!
If you would like a high-res version of any of these images, please contact Autumn Heacox, Director of Communications & Marketing (aheacox@cncda.org).
California New Car Dealers Association Publishes 2024 Economic Impact Report
CNCDA published our 2024 Economic Impact Report this week. The report highlights the contributions new car dealers have made in charitable donations, taxes paid, and employment data, among other dealership trends related to California’s economy.
California’s franchised new car dealers continue to act as significant statewide contributors. In 2024, California’s new car dealers sold 1.76 million new vehicles, employed over 138,478 hard-working Californians, and paid $13.8 billion in statewide taxes. In 2024, the average California new car dealership employed roughly 96 people per dealership.
California’s new car dealers contributed significantly to the state’s economic health, paying a total of $8.83 billion in state sales tax in 2024, an average of $6.15 million of sales tax per dealership. The average total taxes paid per California dealership in 2024 was $9.53 million, totaling $13.86 billion statewide.
New Car Dealers sold 387,368 electric vehicles (EVs) in 2024 which represents 22% of the total new light-duty vehicles sold in the Golden State last year. The EV market share in California is three times higher than the EV market share in the rest of the United States. Dealers anticipate spending an average of $336,000 each on EV charging infrastructure in 2024 to help meet the needs of CA’s EV consumer demand.
Additionally, California’s new car dealers consistently act as local community stewards year after year, giving $70.75 million to charitable and civic organizations in 2024, an average of $49,300 per dealership to good causes.
The report is made possible by CNCDA’s dealer members, who completed the association’s annual Economic Impact Survey and statewide auto sales data.
About CNCDA For 100 years, the California New Car Dealers Association has represented California’s franchised new car and truck dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles and provide automotive products, parts, services, and repairs. In 2022, California’s franchised new car dealers sold more than 1.6 million new cars and trucks, employed more than 136,000 people, paid $8.46 billion in sales tax, and donated $62.84 million to charitable and civic organizations. As the nation’s largest state association of franchised automotive dealers—with over 1,200 members—CNCDA provides legal compliance and legislative, regulatory, and legal advocacy.
New ‘CALIBRATE’ Coalition Calls for a Smarter Approach to California’s Zero-Emission Vehicle Mandate, Launches Media Campaign
SACRAMENTO— Today, a coalition of businesses, trade groups, and consumer advocates launched CALIBRATE, a campaign advocating for a more reasonable and balanced transition to zero-emission vehicles—one that works for consumers, automakers, and California’s economy and environment.
Under California’s current Advanced Clean Cars II (ACC 2) mandate, automakers must ensure 35% of all new car sales are zero-emission starting this year, ramping up annually until 2035, when new gas-powered car sales will be fully banned. But the latest data shows demand for zero-emission vehicles has stalled—sales grew just 1% in 2024, compared to 46% growth in previous years.
“We fully support California’s leadership in clean transportation,” said Brian Maas, president of the California New Car Dealers Association. “The state has made incredible progress, but forcing consumers to buy zero-emission vehicles before they’re ready isn’t the answer. A more balanced approach would build on California’s success while aligning with real demand, available infrastructure, and economic realities—without leaving Californians behind.”
“The data is clear,” said Maas, “Consumer demand isn’t keeping pace with the mandate, and only EV-exclusive automakers will hit the state’s 35% threshold in the upcoming model year. Without a pause to enforcement of ACC 2, the state – and millions of Californians – will start facing serious economic consequences in a matter of months.”
The Consequences of a Rushed Mandate
Failing to meet ACC 2 comes with steep penalties for manufacturers—$20,000 per noncompliant vehicle sold. Instead of paying fines, automakers will simply cut shipments of cars to California—or stop sending them altogether. What will the impact be?
Billions lost for public services – New car sales generate $13 billion annually in state and local tax revenue, funding fire departments and law enforcement, schools, public safety and first responders, roads, parks and other essential services.
Risking climate progress – If options shrink and prices spike, drivers who aren’t ready for an EV or whose lifestyles don’t support one will hold onto older, higher-emission vehicles longer—undermining the very goals the mandate sets out to achieve.
A major infrastructure gap – California needs 1.2 million chargers by 2035 but has just 150,000 today. Renters and those in multi-unit housing, who will have to rely on public charging, will be hit hardest.
Fewer new cars, higher prices – Automakers won’t absorb massive fines—they’ll just reduce shipments. Even traditional hybrids, despite their lower emissions and consumer popularity, don’t count toward the mandate because they aren’t classified as zero-emission vehicles. That means automakers can’t use hybrid sales to meet their targets, further limiting consumer choices. With fewer options, prices will rise across the board—on EVs, hybrids, and gas-powered cars alike. And with EV subsidies uncertain under the current administration and Congress, affordability concerns will only grow, making it even harder for consumers to make the switch.
The CALIBRATE coalition is launching a sustained media campaign to educate Californians on the real-world impact of ACC 2 and to urge regulators and policymakers to calibrate the mandate to reflect market realities.
More information, including an explainer video, can be found at CalibrateCA.org.
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ABOUT CNCDA:
For over 100 years, the California New Car Dealers Association has represented California’s franchised new car and truck dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles and provide automotive products, parts, services, and repairs.
In 2024, California’s franchised new car dealers sold more than 1.85 million new cars and trucks, employed more than 138,478 people, paid $8.83 billion in sales tax, and donated $70.75 million to charitable and civic organizations. CNCDA is the Nation’s largest state association of franchised automotive dealers—with nearly 1,200 members— and provides legal compliance and legislative, regulatory, and legal advocacy.
CNCDA Donates $100,000 to NADA Relief Fund for SoCal Wildfire Victims
CNCDA Donates $100,000 to NADA Relief Fund for SoCal Wildfire Victims
SACRAMENTO, CA, February 4, 2025— Today, the California New Car Dealers Association (CNCDA) announced a major donation to support individuals affected by the devastating wildfires in Southern California. CNCDA is donating $100,000 to the National Automobile Dealers Association (NADA) Foundation’s Emergency Relief Fund.
This donation, unanimously approved by the CNCDA Board of Directors last month, will directly help dealership employees and their families significantly impacted by this disaster.
The wildfires have caused significant destruction across the region, forcing several dealerships to close their doors temporarily and, in some cases, devastating many employees’ homes.
“We were deeply concerned to hear about the wildfires in Southern California. We’ve been in close communication with our dealer members and have extended our support for their employees who were most affected by this crisis, ensuring they are safe and cared for. CNCDA’s members remain committed to providing assistance to their fellow dealers in the aftermath of this tragedy,” noted Brian Maas, CNCDA President.
The NADA Emergency Relief Fund offers financial assistance to dealership employees impacted by disasters, with grants of up to $1,500 available to help those in need.
“For years, the NADA Emergency Relief Fund has been there to help dealership employees and their families recover from natural disasters like hurricanes, wildfires, tornadoes, and floods. Contributions like this one from CNCDA are only possible thanks to the generosity of dealers across the country. CNCDA’s significant donation is especially meaningful, given how hard Southern California has been hit by these fires. It truly shows how dedicated California dealers are to taking care of their own, especially during times of crisis,” added Mike Stanton, NADA President and CEO.
CNCDA’s contribution reinforces our members’ commitment to supporting the communities in which they operate, especially in times of hardship.
For over 100 years, the California New Car Dealers Association has represented California’s franchised new car and truck dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles and provide automotive products, parts, services, and repairs. In 2023, California’s franchised new car dealers sold more than 1.77 million new cars and trucks, employed more than 138,807 people, paid $8.74 billion in sales tax, and donated $67.66 million to charitable and civic organizations. CNCDA is the Nation’s largest state association of franchised automotive dealers—with nearly 1,200 members— and provides legal compliance and legislative, regulatory, and legal advocacy.
2025 CNCDA Welcome Reception at NADA Show
SACRAMENTO, CA – The California New Car Dealers Association would like to express our heartfelt appreciation to all who braved the weather, secured their flights, and made it to our Welcome Party at the 2025 NADA Show in New Orleans! Additionally, we want to sincerely thank our sponsor partners who helped make this event possible for our membership. We hope to see you all next year!
If you would like a high-res version of any of these images, please contact Autumn Heacox, Director of Communications & Marketing (aheacox@cncda.org).
CNCDA Donates $100,000 to NADA Relief Fund for SoCal Wildfire Victims
CNCDA Donates $100,000 to NADA Relief Fund for SoCal Wildfire Victims
SACRAMENTO, CA, February 4, 2025— Today, the California New Car Dealers Association (CNCDA) announced a major donation to support individuals affected by the devastating wildfires in Southern California. CNCDA is donating $100,000 to the National Automobile Dealers Association (NADA) Foundation’s Emergency Relief Fund.
This donation, unanimously approved by the CNCDA Board of Directors last month, will directly help dealership employees and their families significantly impacted by this disaster.
The wildfires have caused significant destruction across the region, forcing several dealerships to close their doors temporarily and, in some cases, devastating many employees’ homes.
“We were deeply concerned to hear about the wildfires in Southern California. We’ve been in close communication with our dealer members and have extended our support for their employees who were most affected by this crisis, ensuring they are safe and cared for. CNCDA’s members remain committed to providing assistance to their fellow dealers in the aftermath of this tragedy,” noted Brian Maas, CNCDA President.
The NADA Emergency Relief Fund offers financial assistance to dealership employees impacted by disasters, with grants of up to $1,500 available to help those in need.
“For years, the NADA Emergency Relief Fund has been there to help dealership employees and their families recover from natural disasters like hurricanes, wildfires, tornadoes, and floods. Contributions like this one from CNCDA are only possible thanks to the generosity of dealers across the country. CNCDA’s significant donation is especially meaningful, given how hard Southern California has been hit by these fires. It truly shows how dedicated California dealers are to taking care of their own, especially during times of crisis,” added Mike Stanton, NADA President and CEO.
CNCDA’s contribution reinforces our members’ commitment to supporting the communities in which they operate, especially in times of hardship.
For over 100 years, the California New Car Dealers Association has represented California’s franchised new car and truck dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles and provide automotive products, parts, services, and repairs. In 2023, California’s franchised new car dealers sold more than 1.77 million new cars and trucks, employed more than 138,807 people, paid $8.74 billion in sales tax, and donated $67.66 million to charitable and civic organizations. CNCDA is the Nation’s largest state association of franchised automotive dealers—with nearly 1,200 members— and provides legal compliance and legislative, regulatory, and legal advocacy.
California New Car Dealers Association Releases EOY 2024 Auto Outlook Report
Year End 2024 CA Auto Outlook Report: Tesla’s Fifth Quarterly Decline CA’s ZEV Market Losing Speed; Hybrids Gaining Traction
Click on the image to view the report.
SACRAMENTO, CA, January 31, 2025— Today, the California New Car Dealers Association (CNCDA) released its California Auto Outlook Report covering 2024 vehicle registrations in the state. The report summarizes California’s new vehicle registrations and predicts anticipated yearly sales. For accurate reporting, please cite Experian Automotive as the data source for CNCDA’s Auto Outlook.
Things aren’t looking so golden for EV automaker Tesla in the Golden State. Tesla’s dominance in the electric vehicle market continues to falter as the brand reported its fifth consecutive quarterly registration decline. Tesla’s registrations fell 7.8 percent in Q4 2024, contributing to an overall 11.6 percent decline in 2024. The company’s market share also dropped by 7.6 points in 2024, now holding 52.5 percent of the Zero Emission Vehicle (ZEV) market for the year. Amongst all brands, Tesla’s share of California’s market is 11.6 percent, down from 13 percent in 2023.
Overall, California’s new vehicle registrations among all brands remain stable. 1,759,141 light vehicles were registered in the Golden State in 2024, representing only a -0.3 percent change from 2023. Projections for 2025 are optimistic, with registrations expected to rise slightly to 1.80 million for the year.
New vehicle registrations in Q4 2024 increased by 4.8 percent compared to the same period in 2023, signaling positive momentum heading into 2025. However, the first quarter of 2025 is expected to remain fairly flat.
Key Highlights The most significant trend to emerge this quarter is the shift in consumer preference within the alternative powertrain sector. ZEV market share for all brands dipped to 21.3 percent in Q4, down from 23.7 percent in Q3 2024. Annual California ZEV totals hit 22 percent (market share in 2023 was 21.7 percent).
Registrations for all alternative powertrains reached 40.2 percent for the year and 42.2 percent in Q4. Notably, hybrids made up the ground lost by ZEVs, gaining 2.4 percentage points in Q4, matching the 2.4 point decline in ZEV registrations. This shift suggests that California consumers may be looking to transition gradually from internal combustion engines (ICE) to fully electric vehicles, with hybrids emerging as an increasingly popular option.
“As dealers, our primary goal is to offer the vehicles that Californians actually want to drive. Whether it’s hybrids, electric vehicles, or traditional models, we are here to meet consumer demand. It’s not about mandates or pushing one type of powertrain over another—it’s about having the right inventory on our lots to serve the needs of real customers and our communities,” says Robb Hernandez, CNCDA Chairman and owner of Camino Real Chevrolet.
Brand Market Share and Summary Among all powertrains and brands, Toyota is king in California, with 289,258 registrations in 2024, a 4.4 percent increase from last year, and now capturing 16.4 percent of California’s market share.
Other YTD market share brand leaders: Tesla and Honda (with 10.9 percent market share). Honda wrapped the year with an 11.5 percent increase in registrations this year (192,166 registrations).
Four brands have improved their registrations by 20 percent (or more) in 2024. These brands include Lincoln (27.6 percent), Land Rover (22 percent), Cadillac (21.7%), and Buick (21.7 percent).
Model Segment Rankings California’s best sellers in the primary segments in 2024 were the Toyota Camry, Tesla Model 3, Honda Civic, Toyota Tacoma, Chevrolet Silverado, Toyota RAV4, Subaru Outback, and Lexus RX.
The top three passenger cars sold in California to wrap 2024 were neck and neck to the finish line. The Toyota Camry came out the winner with 11.4 percent of the market. Tied for second place were the Honda Civic and Tesla Model 3, with 11 percent of California’s market share. The top three light trucks sold were the Tesla Model Y (128,923 registrations), the Toyota RAV4 (65,041), and the Honda CR-V (49,920 registrations).
Regional Variances Northern California saw a 12.6% decline in passenger cars but a 1.5% rise in light trucks, with ZEVs accounting for 25.1% of the region’s market share. In Southern California, passenger car registrations dropped by 10.3%, while light trucks grew 5%, with ZEVs making up 22.7% of the market.
California Auto Outlook Quarterly is produced for CNCDA by Auto Outlook, Inc., an independent research company that analyzes statewide and regional automotive markets. When reporting these auto industry trends, please acknowledge the data source: Experian Automotive.
The report provides comprehensive information on California’s new vehicle market, including annual trends, a vehicle powertrain dashboard, a segment watch, the top five models in each segment, brand scoreboards, regional comparisons, and more. Visit www.cncda.org.
About CNCDA
For over 100 years, the California New Car Dealers Association has represented California’s franchised new car and truck dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles and provide automotive products, parts, services, and repairs. In 2023, California’s franchised new car dealers sold more than 1.77 million new cars and trucks, employed more than 138,807 people, paid $8.74 billion in sales tax, and donated $67.66 million to charitable and civic organizations. CNCDA is the Nation’s largest state association of franchised automotive dealers—with nearly 1,200 members— and provides legal compliance and legislative, regulatory, and legal advocacy.
CNCDA Demands VW Cease Unlawful Competition Through Scout Brand
SACRAMENTO, CA, December 20, 2024— Today, the California New Car Dealers Association (CNCDA) issued a cease-and-desist letter to Volkswagen (VW) and its affiliate Scout following their recent announcement that they plan to sell vehicles under the Scout brand to California consumers in direct violation of state law.
CNCDA is the nation’s largest state dealer trade association (made up of nearly 1,200 California dealerships and over fifty VW dealerships), and its goal is to protect both the franchise system and California consumers while promoting legal and ethical business practices. CNCDA’s cease-and-desist letter details VW’s ongoing violations of California Vehicle Code section 11713.3(o). Scout is a VW affiliate under California’s Vehicle Code. California law states that manufacturers may not compete with their own franchisees by using affiliates to directly sell or service vehicles, which is precisely what VW and Scout intend to do.
VW’s violation of this state law threatens the livelihoods of thousands of existing VW dealership employees and could significantly impact tax revenues. VW’s illegal direct sales plans disregard the legal framework that protects consumer choice and competition within California’s automotive marketplace. VW’s sales of Scout-branded vehicles without participation from franchised dealer partners circumvent its legal obligation to ensure accountability, fair pricing, and consistent customer service.
“Volkswagen’s direct sales via its Scout brand represent a direct threat to the jobs, investments, and consumer protections California’s franchise laws are designed to safeguard,” said CNCDA President Brian Maas. “We strongly encourage Volkswagen to heed our call to abide by California law and immediately stop offering Scout vehicles directly to consumers without using their business partner local dealers.”
In response to concerns that VW would use the Scout brand to compete directly with their franchisees, last year, CNCDA sponsored a franchise bill in the California State legislature, Assembly Bill 473 (“AB 473”). The bill strengthened the state Vehicle Code to prohibit these actions. Scout was active throughout the bill’s legislative journey and publicly stated that it would not be able to choose its current distribution model if the bill were to go into effect. AB 473 was unanimously approved by California’s legislature, signed into law by Governor Newsom, and became effective on January 1, 2024. VW’s intent to sell vehicles without using franchisees using the Scout brand is a brazen violation of the law.
CNCDA remains steadfast in ensuring California law is followed and franchised dealers are protected. The association is prepared to take further action should this letter not result in the immediate cessation of direct sales by VW via Scout.
Media Contact: Autumn Heacox, Director of Communications & Marketing, (916) 441-2599 x105 Aheacox@cncda.org
ABOUT CNCDA: For 100 years, the California New Car Dealers Association has represented California’s franchised new car and truck dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles and provide automotive products, parts, services, and repairs.
In 2023, California’s franchised new car dealers sold more than 1.77 million new cars and trucks, employed more than 138,807 people, paid $8.74 billion in sales tax, and donated $67.66 million to charitable and civic organizations. CNCDA is the Nation’s largest state association of franchised automotive dealers—with nearly 1,200 members— and provides legal compliance and legislative, regulatory, and legal advocacy.
