By David Shepardson

(Reuters) – Groups representing U.S. auto dealers announced plans to challenge Volkswagen's Scout Motors decision to sell directly to consumers, bypassing independent retailers.

The National Automobile Dealers Association (NADA) stated it, along with state associations, will contest this decision in courthouses and statehouses nationwide.

Scout Motors declared on Thursday that it would follow electric vehicle manufacturers like Tesla by eliminating a traditional independent dealer network for direct vehicle sales and servicing, ensuring transparency on prices and a fast sales process.

Scout did not respond to requests for comment immediately.

NADA CEO Mike Stanton expressed disappointment over VW's choice to sell Scout vehicles directly to consumers, asserting that it competes unfairly with U.S. dealer partners, and promised to mount a challenge.

In an earlier statement to Reuters, Scout Motors CEO Scott Keogh indicated that the brand aims to operate about 36 U.S. retail centers when sales commence in 2027, potentially increasing to 100 over time. Other EV companies like Rivian and Lucid also utilize direct sales models.

Keogh stated, "It's critical moving into the future in unstable environments to control your customer, control your margin, control your operational excellence," highlighting the rationale behind the direct sales strategy.

State laws restrict automakers with independent dealer networks from selling directly to consumers, as evidenced by Tesla's lawsuit against Louisiana over its direct sales ban.

Scout aims to manufacture up to 200,000 electric trucks and SUVs annually starting in 2027 at its $2 billion plant in South Carolina, which is currently under construction. The automaker announced plans to offer extended-range variants including a small gasoline engine.