At this point, it’s no secret that dealers are anticipating a significant financial blow to their bottom line — and data from Canadian Black Book’s latest national survey appears to back up the inevitable.
According to the survey, conducted between April 6-14, a third of dealers have experienced a 50% decline in their overall business due to the COVID-19 pandemic. Another third of respondents experienced a drop of 75%, and the last third (28%) reported a loss of business of more than 75%.
“These numbers are staggering, to say the least. It is hard to imagine how these dealers will weather the storm, but we know they are resilient and will do just that,” said Brian Murphy, VP of Research and Editorial at Canadian Black Book. “The silver lining in this is that we know this is temporary. There will be pain, but also a lot of learnings will come out of this that will make dealers more versatile and ready for adversity.”
The survey also reveals that 60% of dealer respondents from across the country have fully closed their sales operations — a direct result of the novel coronavirus pandemic. And 36.5% revealed that even their service operations are closed.
It’s worth noting that, as of April 15, post-survey, dealers in Quebec who had gone dark (or mostly dark) due to government restrictions are now allowed to progressively re-open their service departments for more than just emergency service needs. This is for those that implement specific health and safety protocols.
In Ontario, dealerships were considered essential services for a short period of time and have since closed showrooms (but not service bays).
As for dealers who are experiencing closures, when asked how long they expect their stores to remain closed, 53% said they did not know, according to Canadian Black Book. Of that same group, 21% believe the closures will last one month while 15.5% expect it to last two months. That’s bad news for dealers, as 27% of respondents have encountered vehicle supply shortages related to COVID-19.
“Canadian Black Book expects that this statistic will increase over the next few months as the ripple effect of global supply chain disruption is fully felt,” said the company in its news release. “The COVID-19 outbreak has certainly crippled consumer confidence in general and specific to the auto sector in Canada. The vast majority of dealer respondents (86%) have suggested that their customers have expressed concern about selling and/or buying vehicles due to the virus.”
Offering special payment options for customers that have been impacted by COVID-19 may help improve this issue. Canadian Black Book said some dealers have also implemented a locked door policy, screening customers before they enter the building, while others are ensuring they maintain a complete sanitization of the premises and vehicles.
