A dealership group in California has sent Volkswagen a cease-and-desist letter over Scout’s direct-to-consumer plans. The dealers contend the move would violate state law and threaten their livelihoods.

The California New Car Dealers Association (CNCDA) has fired the opening round in a broader legal assault on Scout Motors over the new Volkswagen subsidiary’s plan to adopt Tesla’s direct-sales strategy for its forthcoming Traveler SUV and Terra pickup.

The association believes the VW Group's involvement legally restricts the brand from cutting out the middleman.

In a statement made to Automotive News, a Scout representative seemed to paint the brand as something different and more separate from VW than other brands under the umbrella, such as having a "proprietary vehicle design" and a platform that has "never ...