PSA Group UK's Citroen, DS Automobiles and Peugeot brands are planning around a 96% decline in new car sales during the UK's COVID-19 coronavirus lockdown, managing director Alison Jones has revealed.
Jones, who is responsible for the French brands' UK operations, warned that a decline in the UK new car market of around 30 to 40% down during March is “masked by the fact that the industry had a good start to the month” during an exclusive interview this week.
“If you look at what's happening in some of the other countries that have gone into lockdown the industry stats show that day by day they're locked down the market is down 96% because they're dealing with the health crisis so we have to plan for that, that's on a day-by-day basis,” she said.
The coronavirus shutdown in China caused domestic sales to drop 96% in the first week of February, while overall sales for February fell 80% year-on-year, according to the China Passenger Car Association.
Jones, the recent recipent of Cox Automotive's Barbara Cox Woman of the Year Award, who also collected PSA Group's Manufacturer of the Year award at last month's AM Awards 2020, said it was “really hard to predict” where the UK market would be by year-end and it would depend on how long the lockdown lasts.
She stressed that it was important for manufacturers and car retailers to “ready themselves” for the restrictions being lifted by putting measures in place to “do things in a different way”.
PSA Group has already put new health and safety measures in place to restart vehicle production when the time is right. These measures include taking the temperature of staff, requiring them to wear masks on site and respecting safety distances between people.
These measures could, potentially, be adopted by individual retailers too, Jones told AM.
“We have a role to play, along with other companies and employers, to try and get the economy back running again once we get through the health crisis,” Jones said.
“This crisis is on a scale that many of us have never seen as a country and a community so our biggest priority is to keep our employees and our customers safe so we're really focused on that.
“Then, secondly, it's how you can keep your business and your teams together and running and focused on what they can do. In any situation like this it's about coming together, having clear steering and then being able to move through the other side.”
Key workers ‘prioritised’ for vehicle orders
PSA and many of its retailers have shifted to selling cars online. However, it could be some time before orders are fulfilled as the Government has asked manufacturers not to handover cars as that is classed as ‘non-essential’ activity.
The exception is vehicle orders for key workers, such as van delivery drivers, and PSA said that they were being prioritised during the crisis.
It currently has vans available in the country so orders can be “turned around very quickly” and deliveries are being done in line with the latest UK Government guidance.
“Vans are seen more visibly now as a lifeline, they’re an essential service to many of us who are in our home, and that’s why we’ve still got the ability to provide additional vans to customers if they’re classified as essential,” Jones said.
“We've seen an increase in the number of customers that want to borrow vans on flexible rental terms. Different businesses are having to increase their services so we're able to do that for them and we've got all our protocols and all the safety to be able to do that.”
PSA is also keeping a “core” network of aftersales businesses open across the country, along with its roadside team, to ensure key workers can “keep moving”, Jones said.
Its aftersales businesses are working to Government guidelines, including cleanliness and sanitation and ensuring that staff are two metres apart. Vans which are brought in have to be left for three hours before somebody else can get in them.
“You can’t just jump in a van, take it into the workshop and turn it around at speed, it requires quite a different way of thinking, the logistics are quite different,” Jones said.
Parts are still available through PSA’s parts warehouses and parts hubs.
“We have enough colleagues and enough processes that mean we can get parts or service facilities to a customer as and when they need it if they’re a key worker and it’s an essential service,” Jones said.
“When we could see what was happening in other countries we pulled more parts across into the UK so if the borders did close we had more parts in the UK and then we looked to move them into the regional and local areas in case anybody was sadly affected by coronavirus and one part of the chain had to be isolated for staff.
“We got them as far out as we possibly could so we could protect colleagues if we had to close the site and that we could serve our customers as well.”
Support for dealers
Jones said that PSA has been working with its dealer councils and speaking to many of its investors.
It has put in place “a whole raft of measures” to support its network for both sales and aftersales and then funding lines. This has included setting lower targets and extended payments.“We got feedback from our network that what we did was good,” Jones said. “The fact we went out quite quickly gave them some certainty for March and into April.
“We'll look again in terms of what we can do when we can see what's happening in April.”
Discussions have already been taking place with some of PSA’s dealer groups and dealer councils to ensure they are “ready to go” when restrictions are lifted.
“People are keen to get back to business and get back to work and they need to, there are livelihoods at stake, so we will do everything we can to support that,” Jones said.
She acknowledged that some dealers have closed and are using the Government’s coronavirus job retention scheme, which allows employers to claim a grant covering 80% of the wages for a furloughed employee, subject to a cap of £2,500 a month.
The Government will also cover employer National Insurance and pension contributions
“We are assessing it (the scheme) and sharing it with our retailers who may not have seen it,” Jones said.
Communicating with staff
Jones has been chairing a weekly call, which any PSA member of staff can dial into and ask questions.
“The first week we had more than 600 people,” she said. “I do a short update on what’s happening within our country, within PSA in the UK and then within PSA globally and then the team can ask questions. I've had feedback that that's been really useful.”
Teams have also been holding virtual meetings with some choosing to do a 10-minute meeting every morning and others opting for a longer meeting partway through the day.
HR has been providing support on remote working, how to lead virtually, managing stress, and wellbeing and mindfulness.
“That has helped people in terms of their wellbeing but it is difficult,” Jones said. “You're having to make difficult choices as a business to manage through this and that causes uncertainty for people.
“The whole situation is causing uncertainty for many of us as we live our personal lives, as well as our work lives, so what I believe in, and what I advocate with my team, is that we're transparent, that we are really clear with our team members and that's why I believe in the regular communication.”
“The business model will change”
In the long-term, Jones believes there could be positive benefits from the new ways of working which businesses have had to adopt.
“I believe our business model as an industry will change,” she said.
“Some of the technologies that we're using to keep in touch could make us really efficient. I don’t think it will fully replace (face-to-face), I think we all like to be out and sociable as well and you can get things done in a room in a collaborative way quite differently to doing it remotely.
“But I think there will be some big learnings that come out of this for us as a society, then us as a community.
“We need to deal with the crisis but then adapt as well for the future and that's what we're thinking about in PSA and working on.”
Author: Sarah Tooze