Mail Order Giant's Discount Golf Irks VW Dealers

Hoping the car's reputation will be enough to prompt customers to risk 'sold-as-seen' purchases, Quelle began offering Volkswagen’s new Golf V model on its Internet site on Monday. To spark interest, Quelle is selling the car for around ten percent less than the average Golf sticker price, a move which has incensed VW dealers across the country.

Volkwagen, too, is not amused and Europe’s largest carmaker has said it will refuse to provide the mail-order outfit with any vehicles since it would violate agreements it has with dealers.

“We aren’t going to deliver any cars to Quelle,” VW spokesman Dirk Große-Leege said, explaining VW dealers are not allowed to re-sell new cars to unauthorized dealers. “Maybe if Quelle is only acting as middleman for new car sales would it be legally acceptable.”

Quelle says that is exactly what it is doing and that it will only facilitate the sale of a new Golf between customer and an auto dealer with which it has an agreement. The company has set up a partnership with Bavarian firm Carplus to act as intermediary with around a dozen authorized dealers.

“It’s correct that VW dealers are not allowed to sell vehicles directly to us,” Carplus manager Heiko Eich told the Reuters news agency. “And they aren’t.”

Dealers angry

The Volkswagen dealer’s association has slammed the Quelle offer as “not serious,” and VW’s Große-Leege dismissed it as largely a PR event, aiming to piggyback on the expected success of the completely revamped Golf. The car, which will be available nationwide starting October 17, has long been one of the best selling models in Germany.

Quelle’s initiative has particularly scared dealers since they have only recently renegotiated contracts with VW that have already squeezed their profit margins. Carplus’ Eich admitted the bulk of the discount passed on to Quelle’s customers, there would be little left over for the participating dealers, who then would hope to make up the losses with high volume sales.

A Quelle spokesman said the company wanted to sell between 3,000 and 4,000 cars a month within two years time. With the popular Golf making up a large chunk of total VW sales, other dealers fear seeing their overall sales dented.

German car dealers, already angered by a European Commission decision last year setting new rules making it easier to set up dealerships at unconventional places like supermarkets, also likely see Quelle’s Internet promotion as another attack on the traditional system of car dealerships.