CNCDA sues Scout Motors and VW, dealer profits rise year-over-year in Q1, auto lobby groups send tariff warning

Hey everyone. Big day today!

We just released the results of the first-ever CDG Dealer Outlook Survey in this morning’s Breakdown newsletter.

Let us know what you think of the findings, and learn how to participate in the next one here.

— CDG

Service department revenue keeps climbing but ticket volume hasn’t changed much:

While both metrics bounce around month-to-month a lot due to seasonality—the split is likely caused by increases in parts costs, and a rise in higher-value services.

Good for top-line performance…

But fewer visits also mean fewer relationship-building moments. And that could hurt long-term retention.

(Data/graph source: Xtime / CDG analysis via Joe Cecala)

John makes an excellent point about warranty work too…

1. California New Car Dealers Association sues Scout Motors and VW

The California New Car Dealers Association (CNCDA) just sued Volkswagen and Scout Motors.

Why?

Under AB 473, passed in 2023, automakers can’t spin up new brands to compete with their own dealer networks.

The CNCDA says VW is doing exactly that—and wants up to $35M in penalties.

VW’s take: Scout Motors is a separate company and taking a direct-to-consumer approach builds customer trust with faster, more transparent buying.

Big picture: California is Scout’s launchpad. But if VW burns bridges with its 45 in-state dealers—it might be a rocky road ahead.

(Go deeper: 4 min. read)

Is dirty customer data killing your retention?

Experian Automotive found 61% of dealer records have bad data—

• Wrong names 

• Old addresses 

• Even outdated ownership records

When your customers move, change jobs, or start families, your data can fall behind—costing you sales. The fix? Experian Automotive’s first-party data solutions clean, verify, and enrich your records so your marketing hits the mark.

Better data means better engagement, smarter targeting, and fewer missed opportunities.

Don’t let dirty data hold you back—stay connected and stay ahead with Experian Automotive.

2. U.S. franchised dealers see year-over-year profit lift in Q1

U.S. franchised dealerships just posted their first meaningful , year-over-year profit gain since the pandemic boom.

But it wasn’t new car margins doing the work.

The lift came from stronger service revenue, rising F&I income, and a March sales rush as buyers raced to beat incoming tariffs.

What’s next? Auto parts tariffs land May 3. And if parts become more expensive, maintaining service profitability could get tougher if consumers put off maintenance and repairs.

(Go deeper: 3 min. read)

3. Auto lobbying giants unite as industry prepares for more tariffs on May 3

In a joint letter sent April 21 to Trump administration officials, six massive auto groups warn that tariff policy is a direct threat to supply chains, jobs, and sales.

Their message:

• Suppliers are already in distress.

• Tariffs could trigger layoffs or bankruptcies.

• And production could suffer across the board.

The ask? Delay the tariffs and give the industry time to adapt before any damage is done.

(Go deeper: 3 min. read)

• Trump considering exemption for automakers on some tariffs, White House says.

• Uber, Volkswagen partner to deploy autonomous ID Buzz vans next year.

• Tesla Finance’s lease penetration hits 4.1%.

• Nissan warns it will post $5.3 billion annual loss as restructuring charges mount.

• CEO Mary Barra on tariffs and GM’s EV future.

Thanks for reading everyone.

— CDG

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