Second lockdown might be a crisis too many for some dealerships

Time 9:13 am, November 8, 2020

England’s second lockdown might be one crisis too many for some dealerships.

That’s the warning from ASE Professional Services – part of profitability specialist ASE Global.

It carried out a survey of nearly 200 dealerships during the first lockdown, asking them various questions about their experiences.

And although the lockdown earlier this year proved a catalyst for change that improved process and business efficiency, this second one could lead to many smaller dealerships taking a more serious look at their future.

As showrooms consider how best to operate in the coming weeks, ASE Professional Services head of tax Chris Cummings has highlighted some of the findings about what they learnt from the first lockdown.

The furlough scheme has been extended to March 31, 2021, as reported by Car Dealer, and among the survey findings, furlough payments were deemed critical to businesses and the morale of staff worried if there was a job to return to.

Communications were also very much seen as a focus of dealerships to ensure staff were comfortable about the lockdown and return to work, whenever that might happen.

Manufacturers were found to be supportive, despite being under pressure themselves, with help more often being indirect, such as deferring costs and guaranteeing bonuses.

The use of social media, websites, call centres and videos to keep customers informed and promote businesses was ramped up, proving successful for most dealerships.

Dealers found the lockdown was consistent locally but reported differences in reopening as regards service departments and sales departments.

And although they were generally satisfied that they’d done their best to maximise opportunity and minimise lost opportunity, all of them said they should have prepared and returned to work sooner than they did.

Cummings commented: ‘Whilst accepting that businesses might be able, with furlough, to survive in their current state until spring, the question is whether consumer confidence having to endure almost 12 months of lockdown will re-emerge.

‘Although entirely different culturally as a nation, the economic downturn in Japan in the late-1980s and early-1990s dampened down consumer demand which has not recovered, as individuals take a more narrow and conservative view of their needs and requirements.

‘It is unlikely this will emerge in the UK, given the higher consumer value for such products as cars, but the immediate future may be a slowdown that will require dealerships to refocus again.’

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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