Financial Anxiety Spurs Abrupt Decline in Dealership Business
Automotive News reports that J.D. Power illustrated how abrupt the business decline has been for dealers in the wake of the pandemic, which caused several state governments to close schools and some businesses while urging its residents to self-quarantine. J.D. Power predicted a 1.7 percent decline in the daily selling rate for March, and the week ending March 8 was about as expected. But then, over the next four days, sales trailed the projected pace by 8 percent. Then, on March 13 and March 14, the deficit grew to 20 percent, and by March 15, it was 36 percent below the baseline projection. For AIADA Chairman Jason Courter's stores in the Seattle area, which has been among the hardest-hit parts of the country, foot traffic was off by about half last week. On the bright side, "people coming in the door are buyers," Courter said last week. But business is down sharply at Courter's Honda of Bellevue and Honda of Kirkland stores outside Seattle. As a result, he cut executive pay, reduced personnel hours, and laid off some staff — though he hoped to reinstate those employees when things pick back up. Read more here.
Senate Falls Far Short of Votes Needed to Advance Coronavirus Bill as Clash Between Republicans and Democrats Intensifies
Senate Democrats blocked a massive coronavirus stimulus bill from moving forward Sunday as partisan disputes raged over the legislation that’s aimed at arresting the economy’s precipitous decline, reports The Washington Post. Lawmakers had hoped to pass the enormous $1.8 trillion bill by Monday but Sunday night they were scrambling to revive talks, with the stock market poised for another sharp drop and households and businesses fretting about an uncertain future. Negotiations continued even as the initial procedural vote fell short, with 47 senators voting in favor and 47 opposed. The tally was well short of the 60 votes that were needed to move forward. The number of “aye” votes was especially low because five Republicans are quarantined over coronavirus fears. Although senators of both parties and Trump administration officials vowed to continue negotiating – around the clock if necessary – the failed vote was the latest negative signal about Congress’ ability to come together around the legislation, which aims to inject close to $1.8 trillion into businesses and households. Read more here.
Automakers Offer No-Interest, Deferred Payments as Dealerships Struggle
The Detroit News reports that as auto dealers across the United States are bracing for what the outbreak has in store for their dealerships as the government expands measures to reduce the spread of the virus, foreign and domestic automakers for which they sell halt production at their plants, and customers stay home. And while automakers have announced new incentives with deferred payments and interest to get people through dealer doors, some retailers just are hoping to survive the downturn — especially if they are forced by the government to close. Some automakers have lessened dealer burdens by reducing monthly target for dealers, offering cash incentives and relaxing terms of dealer loans. "It seems to me like a lot of the programs are about the uncertainty about people's employment," said Jessica Caldwell, executive director of industry analysis at auto information website Edmunds.com Inc. "Am I going to be able to make a payment on time? It's not the traditional $10,000 off. It does feel like the incentives are going to be around the understanding of rough economics times for a few months in terms of payments and whatnot." Read more here.
Global Auto Production Could Fall By 1.4 Million Vehicles This Year
As the coronavirus spreads across the globe, shuttered auto plants in Europe, North America, and Latin America could reduce global production this year by more than 1.4 million vehicles, according to new research from IHS Markit. CNBC reports that auto plants across the globe have announced plans to temporarily suspend production in order to sanitize facilities and prevent the spread of COVID-19. The hiatus, which could last for nearly three weeks in some cases, would create an immediate cash crunch to automakers through lost vehicle production. In Europe, where assembly operations have shut down for an average of 13 working days, the temporary closures will cut production by more than 880,000 vehicles, according to global information provider IHS Markit. The shutdowns in North America, which IHS Markit estimates will cost an average of six full days of production, will cut output by 480,000 vehicles. New measures to contain the pandemic in Brazil and Argentina will cut production by 80,000 vehicles in South America, IHS Markit predicts. Read more here.
Nissan Readies Revival Plan, Though Timing is 'Terrible'
Years ago, under Carlos Ghosn, Nissan Motor Co. bet on a future where global car sales would boom, driven by a bulging population in developing countries. According to The Wall Street Journal, that future never came to pass, and now Nissan is gearing up for a restructuring plan due by May that is expected to involve closing plants, retrenching in major markets and cooperating more with its biggest shareholder, Renault SA of France. “We wanted to grow much faster than the market, and the market didn’t grow in line with our expectations,” said Chief Operating Officer Ashwani Gupta, who is in charge of the restructuring plan, in an interview last week. The coronavirus is taking the bottom out of the car market. Nissan’s sales in China were down 80% in February from a year earlier, and they fell 13% in the U.S. in the same month, before car companies announced factory shutdowns. Those are its two biggest markets, and Nissan hopes to jump-start its U.S. sales with a new Rogue sport-utility vehicle and Frontier pickup. Read more here.
Webinar: Customer Care and Business Guidance During the Pandemic
Join AIADA’s Chairman and dealer, Jason Courter from Honda of Kirkland, and industry leader Kendall Billman for a special webinar on how to nurture your customers and keep your business viable.
Kendall will discuss how to:
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Address customer concerns and struggles, example: let the dealer become the liaison with the captive or bank
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Manage the service lane during this crisis
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Data-mine the correct customers
Jason Courter will share his firsthand experience from the west coast pandemic epicenter of Kirkland, Washington.
WHEN: Thursday, March 26 - 2:00 p.m. EDT.
AIADA's One-Page Print-Out: Plan and Respond to Coronavirus at Your Dealership
Federated Insurance: Coronavirus and Pandemic Directives and Go-To Resources
FAQ: How is the Government Responding to the Coronavirus Pandemic?
Around the Web
Best Car-Related Movies to Watch While in Self-Quarantine [BMW Blog]
Crazy Deals on New Cars, Trucks, and SUVs [MotorTrend]
Porsche Traykan is a Sports Car Disguised as a Pickup Truck [CarScoops]
Petersen Automotive Museum Holding Free Online Lectures [Autoblog]
