Motor dealers reopened their showrooms this week after the Covid-19 closedown but, while back to business, it’s not business as usual.
There are strict social-distancing and safeguarding regulations but there are also no guarantees people are going to be rushing to make up for lost time and buy a new car, commercial vehicle or motorbike.
Car sales were being squeezed even before the Coronavirus pandemic reared its ugly head with economic uncertainty following Brexit. With Covid-19, things have gone from bad to worse.
While lockdown restrictions are being relaxed, the country is now in recession and many potential customers’ circumstances may have changed such as more debt, losing their job or less disposable income.
Meanwhile, more people working for home might see them keeping cars longer as they cover fewer miles, down-sizing models or even shunning owning a car by hiring one when needed or joining a car-sharing club.
Concern about returning to showrooms
That’s assuming the buying public feels ready to go back to car showrooms now they have reopened. Research from Auto Trader said 76% of car buyers were concerned about returning to showrooms.
And that’s also before you consider how consumer buying habits are changing.
The 10-week lockdown saw more people having to turn to buying online, with shops and businesses closed, and switched-on car-makers, motor groups and individual dealers were quick to realise, and react to, this momentous step-change in buying behaviour.
Volvo, Jaguar Land Rover and Toyota are among those marques stepping up digital sales platforms to move online business up a gear.
Despite launching online car sales with contactless dealership handovers, Toyota GB says its UK franchised car retail network would remain “the expert point of contact”.
They soon realised that if your showroom is shut, your website and digital presence is your shop window and the easiest way to keep in touch with your customers remotely from a distance of far more than two metres.
Many already had online sales platforms but still saw the showroom experience as key to sales, even though brokers have been growing their car-buying businesses online for many years.
So Covid-19 has comes as a timely wake-up call for many of them who are now putting serious investment into upgrading their websites and digital presence. I can testify to that from increased interest and inquiries from businesses looking for quality web content to engage customers online.
I know of dealerships, both car and motorcycle, which have taken orders for both new and used models, and completed the transaction, by phone and online and delivered the vehicle to the new owner’s home.
Click-and-collect orders
More recently, customers have been able to operate a click-and-collect ordering system provided they did not go into the showroom.
Some drivers will question buying a car without driving it, checking its practicality or even seeing it in the metal but many are happy to change for the same brand or model. They will happily assume the car is fit for purpose, and getting from A to B, and must be better than the one they currently drive. It’s called customer loyalty – be it to manufacturer, model or motor trader.
The internet is also a fantastic research tool with a wealth of news, views and reviews – road tests, pictures and videos about models and products so buyers can make informed decisions.
I suspect the retail motor industry has moved on a few years, in a few weeks, in the way it does business with the customer experience moving more online.
No matter how modern, and slick, a dealership’s showroom and sales system are, many people, particularly younger motorists, find it increasingly outdated in our fast-moving world. Many experts in the motor trade and finance industry are suggesting a permanent move away from showroom-based sales is inevitable.
It also comes at a time when many big players, including Ford and Vauxhall, plan to reduce the number of their main dealerships.
And merging motor groups, such as PSA Group with Fiat Chrysler Automobiles (FCA), would see a big brand business linking Peugeot, Citroen, DS Automobiles and Vauxhall with the likes of Fiat, Alfa Romeo, Chrysler, Jeep and Abarth. The result could be multi-franchise dealerships rather than multiple sites.
Cambria Automobiles chief executive Mark Lavery told Automotive Management last month he expects “Darwinian evolution” of the car retail sector. Up to 25 to 30% of car retail businesses could go out of business or be taken over within two years as the effects of the pandemic continue to take their toll.
Meanwhile the AM Covid-19 car retail recovery survey revealed that car retail group operators feared more than 30% of the sector’s workforce could go because of the slump in trade and changes to operational practices enforced by the pandemic.
This worldwide Covid-19 pandemic is not the end of the world but it’s the end of the world as we knew it.
Social-distancing, essential travel, working from home and the whole lockdown scenario are changing people’s thinking and the way we do things in future, possibly forever.