Calls from German car dealers for support from the government are increasing after they returned to work a week ago to find trade drastically down.
Car dealers in Germany were among the first businesses allowed to reopen on April 20 and emerging reports from the trade – a little over a week after restarting – is one of empty showrooms, few customers and business 40 per cent of what it was.
Manufacturers, suppliers and dealers in the country have now joined together to call for state support for the industry which has been battered by coronavirus.
The picture from Germany will be a worrying one for UK dealers who are carefully watching their European counterparts who are one one step ahead in the coronavirus timeline.
MotorZeitung.de reporter Rainer Strang said: ‘Nobody had expected that customers would queue after the state-ordered closure of the trade. However, the fact that the interest in new cars seems to be so low has surprised many dealers and fuelled new concerns.
‘The call for financial support from the sector is growing louder – not only from retailers, but also from manufacturers and suppliers.’
Dealer boss Gabriele Gieraths, who runs Opel, Hyundai and Seat dealers just outside Cologne, told Stang’s website that there was a very early spike in customers – but that dropped off rapidly.
She said: ‘In the first two days, customer interest was surprisingly great. But it is now unthinkable to win new customers.’
German dealers saw sales drop 80 per cent during the shutdown, but the trade got cautiously back to work since nine days ago.
Dealerships have enforced 1.5m restrictions around staff, have put up perspex screens and drawn markings on the floor so customers know where to stand.
Other dealers in the country are reporting business at 10-50 per cent of levels they were experiencing before the lockdown.
With supply of new cars in the country plentiful, many are expecting big discounts and incentives are coming.
FCA has introduced deferred finance schemes which allow customers to drive away in a new vehicle today and not make a payment until January 2021.
Other car manufacturers Car Dealer Magazine has spoken to report showroom traffic is 40 per cent of what it was.
John Gardiner, corporate communications spokesman for Ford of Europe, told us: ‘We are seeing customers in our dealerships with the majority interested in purchasing new vehicles.
‘However, not surprisingly given the current environment, showroom traffic is less than usual at present – but it is growing and we expect it will return to more normal levels as time progresses.’
Ford is offering customers a three-month payment holiday on selected new cars in Germany, just as it is here in the UK, in the hope it can entice customers into showrooms.
Autohaus.de reports a survey by the Federal Association of Free Car Dealers which points to trade being 50 per cent lower than normal – and some 60 per cent of German dealers responding said they feared for their future.
One told the website: ‘The whole thing is a catastrophe of indescribable proportions and it will stay that way for a long time. People have other worries than buying cars.’
Now calls for incentives from the government are getting louder – and just as they do here, dealers would like to see a scrappage scheme introduced and cuts in VAT.
Thomas Peckruhn, vice president of the German motor trade association, told a press agency: ‘It would be extremely important now to offer additional incentives for electric and hybrid cars and for combustion engines with the latest pollutant standards.’
Hildegard Müller, president of the Association of the Automotive Industry (VDA), added that it is important that ‘appropriate measures’ are implemented soon.
She told MotorZeitung.de: ‘Only a scheme with a broad impact will have a significant effect on customers’ purchasing decisions and thus on production and the entire value chain.’
Car dealers in the UK will now be turning to the organisations that lobby on their behalf for help and support in pushing the industry’s needs when they are allowed back to work.
The SMMT’s Mike Hawes told us earlier this month: ‘The time will come when we may need to assess what, if any, measures are needed to stimulate the market, and we will discuss with members and other stakeholders in good time.’
The UK automotive industry is responsible for 823,000 jobs and 1.3m cars are produced in the UK every year. It generates £82bn in turnover and contributes 14.4 per cent to UK goods exported. Help getting back to work successfully – so UK dealers don’t suffer the same fate as Germany – will be more important than ever.
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