8:37 am, October 17, 2020
Car dealers are better prepared for a second lockdown if the government moves to tighten its tiered restrictions further.
This weekend more than half of England is under heightened coronavirus restrictions as the severest measures come into force in Lancashire and Londoners are banned from meeting indoors.
It follows an announcement yesterday by the Welsh First Minister Mark Darkeford that a full lockdown lasting two to three weeks could be announced as soon as Monday.
Some car dealers we spoke to this week now fear a second lockdown across the country is ‘inevitable’ and are calling on car manufacturers and the government to support them if their businesses are forced to close.
While most feel a full shutdown of retail is unlikely, they point to falling sales in areas where restrictions have tightened and a collapse in areas where travel has been banned.
Waylands Automotive boss John O’Hanlon said he feels a second national lockdown ‘feels inevitable’, but said his company ‘learned a lot’ when they were forced to close for 10 weeks in the spring.
He told Car Dealer: ‘We have all learned from the first lockdown. It challenged our processes, our premises and of course our people, but we did adapt quickly.
‘We now have digital tools and solutions available that we didn’t have in March. Our sites have been adapted to be fully Covid resilient in both layout and in terms of the stocks of PPE.
‘And our people understand how to be as effective as possible without a showroom environment to operate in.’
Wessex Garages MD Chris Wiseman – who is already battling stringent rules in Wales – thinks a ‘national reset’ will be implemented at some stage.
He said: ‘Footfall in South Wales is being affected with a limited number of appointments cancelled despite the showrooms being a safe environment.
‘I suspect pressure and the current increase in widespread cases will mean some kind of national reset.
‘The motor trade is typically resilient, and most dealers have very stringent measures in place for reducing the risk of Covid-19 and for managing the business in the online space.
‘What we will need is a clear definition of what dealers can and cannot do during a lockdown to avoid confusion for us and our customers.’
Vines BMW MD Sean Kelly isn’t so sure a second national lockdown will be imposed, but said dealers are better prepared to cope with online-only sales now than they were back in March.
He told Car Dealer: ‘I think the vast majority of dealers are significantly better prepared for a second wholesale lockdown, even though I don’t consider this a correct next action nationally.
‘I am confident the industry would make a much better fist of the online remote selling opportunity afforded to them from any local, or otherwise, closure of retail.
‘But I don’t think a national lockdown will occur, and I don’t think it should.’
In a Downing Street press conference yesterday, Boris Johnson resisted calls to impose a short national lockdown, but said he ‘can’t rule anything out’.
The Scientific Advisory Group for Emergencies (Sage) has said the R rate of coronavirus transmission for the whole of the UK has nudged up to between 1.3 and 1.5.
Sage added there had been no change to the course of the pandemic in the last month, suggesting no effect from measures such as the rule of six.
Mike Jones, chairman of ASE Global and compiler of the Car Dealer Top 100 list of most profitable dealers in the UK, said he still thinks regional lockdowns will be more likely.
He said: ‘Dealers are undoubtedly better set up now to deal with a second lockdown.
‘When the first lockdown happened it was an unprecedented situation. Retailers worked phenomenally hard to develop collection and delivery services in addition to improving their digital offering.
‘We now have some retailers who can genuinely claim to offer seamless omni-channel retailing which is a huge step forwards.’
Many dealers invested heavily in a digital sales solutions during lockdown and it has helped drive the growth coming out of it. However, Jones believes support will be needed for the industry from the government if restrictions do cause car dealers to close.
He added: ‘In areas where there are severe local lockdowns we have seen a reticence of people to travel.
‘The local lockdowns appear to impact both consumer confidence and retailer access, with a resulting dampener put on trading activity.
‘Business would need a scheme akin to the original furlough scheme to enable them to put a pause on employment, in addition to further government cashflow support in order to survive any lengthy lockdown.’
Umesh Samani, chairman of the Independent Motor Dealers Association, said a second lockdown would be ‘devastating’ for an industry that has been recovering well since dealers were allowed to reopen on June 1.
He said: ‘IMDA dealers are already saying that deals are being cancelled by customers due to lockdown situations and sales and leads are getting less after such a mad rush.
‘It’s a fine balance between lockdown and the economy. I don’t think we’ll have the same lockdown as March, but most businesses are better placed if it did happen.
‘It would still have a devastating effect as it would definitely knock customer confidence especially coming to the quieter time of the year for car sales.’
Jim Holder, editorial director for Haymarket Automotive, publishers of What Car? and Autocar said the good news is ‘switched on’ dealers are better prepared in every way for tougher measures if they come.
He added: ‘This ranges from how to operate dealerships in Covid-secure ways, to how to sell and talk to customers online, or to deliver to the door – the choice of avenues for customers to approach retailers has accelerated.’
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