12 June 2020

A pan-European survey carried out by Autovista Group has revealed how firms within the automotive industry are reacting to the impact of coronavirus (COVID-19). Part two of the results focuses on the activities and opinions of dealers, manufacturers/importers and leasing companies. It highlights the staggered nature of the impact of the pandemic and the variances in responses as businesses try to adapt.

Carried out in April, over 400 Autovista Group customers completed the survey from across Europe. This included respondents in Germany, Spain, France, Italy, Austria and the UK. They also ranged from dealerships to manufacturers and from workshops to financial services.

Closures

By early May, only 46% of dealers’ showrooms were closed; a further 10% of dealers were considering closure. An additional one third had limited their service to key handovers, according to respondents.

Independent dealers were more likely to have gone for full closure than franchised dealers (55% compared with 39%), however, and single-brand franchises were more likely to have shut up shop than multi-brand franchises, suggesting a quicker response to the crisis from smaller firms. Only 23% of dealers had closed their repair shops entirely, but 34% had limited their service to emergency repairs.

Analysis by country tells a more complex story, however. In the UK, 90% of dealers had closed their showroom entirely by May compared to only 9% in Germany. In Austria, the figure was 51%. Only 50% of UK dealers expecting to remain closed for two months or less, compared to 100% of respondents from Germany and 97% of respondents from Austria.

Consumer behaviour

In part one of the survey results, we saw that, for now, the industry does not see consumer behaviour changing as a result of the pandemic to the extent that people will prefer to buy their next car online rather than from a showroom.

While only 27% of respondents agreed that was likely, this has not stopped dealers seeing a move to online retail as an important tactic in tackling the pandemic while in its midst. Over half of dealers (57%) have already increased their efforts to sell vehicles through online portals, and a further 14% are considering doing so. Franchised dealers are slightly more likely to be taking a lead online, with 57% (compared to 50% of independent dealers) already having increased their efforts to sell online.

It appears the comparative uncertainty faced by dealers in the UK is having an impact on digital sales, too. While in Germany and Austria, two thirds of dealers have been proactive in selling vehicles online, this figure drops to less than one third in the UK.

The survey found that 75% of dealers are already controlling costs or considering doing so by decreasing advertising, and almost 66% have stopped – or will stop – adding cars to their stock.

Perhaps unsurprisingly, independent dealers have been more likely to control costs in this way, with 52% of them stopping adding cars to their stock compared to just 32% of franchised dealers. Conversely, 60% of franchised dealers have already decreased their advertising compared to 48% of independents.

Manufacturers and importers

Automotive manufacturers and importers appear to have responded more quickly than dealers to the coronavirus pandemic, possibly because business as usual was even less of an option for them. When the survey results were analysed in early May, the vast majority had already made all the suggested changes to the way they operate. Almost all manufacturers and importers (96%) had already asked their office staff to work from home; almost two thirds at reduced hours, with this option still under consideration by a few. Over two thirds had closed production lines, (the remaining third saying this option was not applicable to them).

Two thirds of respondents expect their operations to remain closed for one to two months and 17% for less than a month.

In contrast with dealers, a significant majority of manufacturers and importers have increased their efforts to sell vehicles via e-commerce, with 71% saying they have already done this and a further 17% saying they are considering online options. Delays to model launches or moves to do them virtually are not an option for most OEMs yet, but around half to two thirds of them are at least considering these tactics for the future. While online uptake may increase, automotive distribution still needs a point of sale.

By the start of May, only 3% of leasing firms were still considering whether to ask office staff to work from home; 80% had already done so, and 17% said this was not an applicable option for them. When those companies that had closed their offices were asked for how long they anticipated they would remain closed, 46% of respondents said it would be one to two months and 21% said three to four months, suggesting leasing firms might expect to remain closed for longer than car dealerships and manufacturers.

Actions that leasing firms have taken to address the pandemic include measures to re-open while protecting customers and staff, reduction in fleet volumes and the creation of new financing plans to meet changing customer need.

Overall, many dealers, manufacturers and importers agree that used cars will be more attractive to consumers than new cars as a result of the crisis. Some leasing firms expect that consumers will require lower outlays and greater flexibility still, with one third predicting that car subscriptions may become more attractive because of the crisis.

The results of part two of the survey can be seen in this whitepaper authored by Sarah Walkley, chief research officer, Autovista Group. Part one of the results can be seen here.

The survey will remain open indefinitely, as Autovista Group continues to monitor the industry’s response to the COVID-19 crisis. The survey can be taken here.