Paul Willis, Volkswagen UK director, has rejected outright the suggestion that retailers are no longer allowed to represent both VW and Audi in the same area.

Several dealers have privately made the claim to AM. But while recent examples, such as Audi dealers Whitehouse and Hartwell giving up VW representation and VW retailer Benfield withdrawing from Audi, add fuel to the fire, Willis refutes the accusations. “That is not true, and many groups do have both,” he says.

Others believe personal issues led to VW terminating dealer groups – but Willis will not comment. Pat Conway, chief executive of Whitehouse, has said the group did not want to give up VW but was happy to represent Audi.

Willis is promising to do all he can to help retailers raise profits. “If they invest in good people and systems to support our customers, they deserve a fair profit, because they take the risk,” he says.

The VW boss accepts lower profitability is at the root of retailer criticism (the carmaker dropped from 11 to 21 in the latest Sewells dealer attitude survey). “We want to take some of the cost out of our customer satisfaction surveys, and help retailers make more money from used car sales and servicing,” he says.

Complaints have focused on perceived damage to the VW brand through incentivised sales. Last month, some dealers paid outright for around 3,000 54-plate cars supplied with discounts of up to 30%.

“I believe we balance sales targets and brand protection well, and other premium brands spent more on 54-plate incentives than we did,” says Willis. “Our residuals are fine and are our value is not being eroded.”

He admits a blunder by one of his team led to an order for 800 Beetle cabrios with unpowered hoods. Dealers have protested that an £800 allowance to sell them was too little, but Willis says it is more than the cost of the option. VW was in fact offering customers £1,500 off.

Denying the use of “bullying tactics”, which is among allegations by disgruntled dealers, Willis says they were “terribly personal and terribly hurtful”.

According to one VW dealer, some retailers were unhappy with John Cook, their main representative, who told AM Volkswagen acted on concerns from retailers.

Cook used to work for VW, which owns his dealership premises in Bristol. But Willis rejects any suggestion that this makes him too close to the company: “John tells us whenever he disagrees with one of our ideas, and does a great job for the network, which elects him.”