Volkswagen SA announced on Monday that it would reduce its VW and Audi dealerships by 20 per cent in a move the company described as a “major realignment”.

Volkswagen SA announced on Monday that it would reduce its VW and Audi dealerships by 20 per cent in a move the company described as a “major realignment”.

The rationalisation programme entails a reduction in the numbers to 112 Volkswagen and 48 Audi dealerships in total. “The dealers have all been notified in terms of the company's franchise agreements,” the company said.

VWSA sales and marketing director Jolyon Nash said the decision to realign the dealer organisation would “be of increased benefit to Volkswagen and Audi customers” in the long term.

"The strategic decision to reduce the number of dealerships was taken in order to meet our objective of having in place a dealer organisation that meets the international standards required by the Volkswagen group," Nash said.

"We also needed to take into account the changing demographics and market trends in South Africa. Obviously, the value of the Volkswagen and Audi franchises remain of primary importance.

To achieve this we will be focusing on the adherence to franchise standards throughout the dealer organisation and encouraging investment in facility and technology upgrades.

"We would also like to reassure our existing and future Volkswagen and Audi customers that they will continue to be our first priority. It is our goal to ensure minimum disruption and inconvenience for the owners of our vehicles during this realignment phase," he added.

In response, national director of the National Automobile Dealers Association (Nada) Gary McCraw said that his organisation had been aware that VWSA was planning a rationalisation programme to reduce its franchised dealerships.

“Nada does not have details of VWSA’s conditions of rationalisation or the arrangements it has made with its dealers in this regard,” McCraw said, “However, my organisation is concerned about the matter. It is important that decent consultation takes place before certain dealerships are rationalised and there might be a need for dealers to be compensated for loss of income”.