2:54 pm, March 29, 2021
Industry experts have been talking about what will and what should happen when car showrooms in England reopen.
Non-essential retail can open again on April 12 if the four tests for easing restrictions are met, and although they’ve been able to operate click-and-collect and click-and-delivery services during lockdown, it’s fair to say dealers are champing at the bit to return to the physical buying experience.
Speaking to the Vehicle Remarketing Association (VRA), Sam Watkins, Manheim Vehicle Services commercial director, said a return to a more normal end-of-lease cycle was expected, following shrinkage in inbound volumes caused by large-scale contract extensions.
‘Efficient Covid-compliant working practices, capable of handling high-volume vehicle refurbishment processing, will be a crucial part of the supply chain cycle,’ she said.
Duncan Josey, digital marketing director at Auto Trader UK, reckoned that although many buyers will enjoy getting back into showrooms and on to forecourts, ‘a significant proportion will still prefer to combine that with the convenience of digital for many more stages of the buying journey’.
That meant it was vital for dealers to steer clear of pre-Covid standards when it came to digital strategies.
VRA chairman and Cox Automotive insight and strategy director Philip Nothard echoed that, adding: ‘As soon as the government announced the reopening dates, wholesale sector performance increased, with both conversions and trade value percentage rises along with increases in the number of attendees joining online sales.
‘As retailers build stock levels in anticipation of consumers returning to the showrooms, vendors need to give accurate and transparent vehicle descriptions to attract decisive bids.’
Jayson Whittington, chief editor at Glass’s, commented: ‘We are expecting a significant uptick in wholesale activity in early April as dealers begin building forecourt stock.
‘There currently does not appear to be an abundance of stock available in auction channels, so if activity does increase, it will likely lead to a strengthening of hammer prices, with residual values firming up as a result.’
Cazana director of insight and VRA deputy chairman Rupert Pontin said: ‘We at Cazana believe there will be an element of pent-up consumer demand from the third lockdown period that will bolster and, in some cases, cause an increase in used car retail prices.
‘This will be exacerbated by a lack of certain types of retail stock, which will mean that consumer demand will outstrip supply for some vehicles.’ And that will continue for some six weeks before demand drops to something that’s more manageable, he added.
Capacity issues
As far as vehicle logistics are concerned, Gary Xuereb, commercial director of DMN Logistics, said there was a huge volume of business set to happen in the corporate, finance and business-to-consumer sectors.
‘We believe that very quickly there could be a surge in demand, and this may cause some short-term capacity issues in the market as providers look to flex resources and recruitment while delivering Covid-secure operations,’ he warned.
Jonathan Butler, partner and head of automotive at law firm Geldards, said there would be ‘huge legal implications’ following the shift to or blending with remote working.
This included businesses being ready to safely have employees returning and staff possibly refusing to come to work because of Covid fears. ‘Are contracts, policies and procedures now fit for purpose? These will be challenging times as businesses navigate their way forward,’ he said.
Remarketing consultant Cliff Deller said the pandemic had highlighted the importance of sticking to the fundamental basics.
‘As showrooms reopen, stock turn will be even more important to buyers and dealers, so vendors should be prepared to invest a little to enhance the vehicle’s appearance, enabling the dealer to put the car on sale with minimal delay. It’s all about doing the basics right every day.’
The four tests for England are the vaccination programme carrying on as planned, vaccines cutting the numbers of deaths or need for hospital treatment, infection rates not risking an admissions surge, and new variants not fundamentally altering the risk of restrictions being lifted.
In Scotland, non-essential click-and-collect will resume from April 5, with all retail reopening from April 26 ‘if the data allows’.
In Wales, all retail will be allowed to start again from April 12 at the earliest. Meanwhile, dealerships in Northern Ireland will be able to resume click-and-collect from April 12.
