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Low risk car showrooms should open in lockdown, dealers argue

Car dealerships closed due to the COVID-19 lockdown

Car dealers are arguing that their showrooms should stay open during the new lockdown announced by the UK Government at the weekend.

After Prime Minister Boris Johnson stated non-essential retailers should close from November 5 to December 2, automotive trade bodies urged the UK Government to allow the motor industry to continue trading.

"There is no evidence that keeping them open would increase transmission of the virus," said Sue Robinson, chief executive of the National Franchised Dealers Association, in a letter to Boris Johnson, which was shared with AM.

"Shutting down vehicle showrooms will not only damage the livelihoods of the 590,000 people employed in vehicle retail. It will reduce car sales to the point where the car factories will have to stop production, impacting the 168,000 people employed in vehicle manufacturing. It will make it harder for emergency workers to obtain the vehicles they need to go to work."

She pointed out to the Prime Minister that the German Government, while imposing a lockdown, has decided to keep vehicle dealerships open.

"We would like the British government to show the same good judgement. You may not yet have been briefed about how vehicle showrooms have been operating since they reopened. They were the first industry sector to reopen on June 1st, operating to COVID-secure guidelines formulated by the industry and BEIS officials. Our dealerships have not caused COVID-19 to spread over the past five months - and nor are they causing it to spread today."

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: As England heads back into lockdown, we need to keep business operating. Auto Manufacturing must have its showrooms open; its proven safe & secure, a very different environment from other retail premises.

"We need to keep the economy turning - safely - and prevent wider job losses."

The NFDA is seeking clarity from the Government but current consensus is that the terms of the spring lockdown apply - workshops may remain open for servicing vehicles of key workers, dealerships may still conduct click and collect or home delivery car sales, and those employees who can work at home should do so.

However this time the government wants UK manufacturing industry to continue operating, which prompted Andy Goss, Vertu Motors' chairman, to state: "Manufacturing products without the ability to retail them makes zero sense. Schoolboy error!" on Twitter.

The news that the Coronavirus Jobs Retention Scheme would be extended to December, enabling workers to be furloughed for the new lockdown at 80% of pay, was welcomed 

"These continue to be difficult times for businesses, individual employees and society as a whole. We can only be pleased that the English economy remains in a position to support as many people as it does; where this all ends up in future is anyone’s guess," said ASE Global's head of tax Chris Cummings.

Fraser Brown, managing director at Motorvise, said: "As Boris Johnson announces a second lock down, car dealers can not take this lying down. It's time to fight to maintain order take whilst following the rules.

"Last time there was a fear factor and a feeling it was important to do the right thing and close businesses and not question and interrogate the rules to see how we can play by them.  Interestingly during the spring lock down there were some dealers and dealer groups that achieved up to 60% of their normal order take."

Brown highlighted what he'd seen strong performing dealers do in the spring lockdown:

  • Communicate with your staff, reassure them, keep your best performing sales people and get your sales managers back on the coal face in the business throughout taking orders.
  • Communicate with your customers, let them know how they can interact and buy from you throughout this period.  Explain they can still buy from you, you can give them video tours of cars and assure them that when they take delivery if the car is not as described they can have their money back!  At Motorvise we have a customer zoom appointment system to allow all enquiries to be automatically booked in to a zoom meeting with your available sales execs. 
  • Keep marketing!!  Many dealer groups cancelled there Autotrader spend and Google adwords spend.  This left the groups who kept spending buying up all the adwords at a tenth of the price and generating many more enquiries, they also had much amplified results from Autotrader and other listings sights hoovering up enquiries that would have gone to other dealer groups.
  • Ensure you are answering your phones, responding to web enquires very quickly, and giving a great customer experience.
  • Keep your service department going.  Don’t stop, drive it and redeploy resource in to the phones to drive incoming service work. 
  • Keep the used car pipeline going, keep on top of prep and ensure you are getting stock available for sale on line, don’t stop!
  • Ensure all your customer showroom systems have a customer portal element to them,  the Motorvise Showroom system has the ability for customers to log in to their own portal and see, IDD, offer sheet, order form demands and needs for finance and insurance, it gives them a place to fill in their own finance proposal and a payment portal so they can put down a deposit.  Ensure your showroom system can do all of these things, many dealers come in to find deposits placed and deals done overnight!
  • Work out who you can re deploy to begin home deliveries of vehicles.  If lock down is extended, taking orders will create a back log you will need to find a way to deliver these vehicles to keep cash flowing, as it is believed at this stage click and collect will not be allowed for car dealers.
  • Turnover is vanity, profit is sanity, don’t let additional products F&I penetration dip during this period, it is possible to set up a post sales zoom appointment with customers that we have evidenced making about £300 per unit out of just additional products (Excluding finance).   This allows customers to fully understand options, to buy additional products but also to get all paperwork done before handover!  It’s a double win so handover becomes all about the customer and there new car not the paperwork!

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