Are dealerships coping with the new normal?
The UK is currently deep into its third national lockdown since March 2020. So, what does kind of effect is this having on car dealerships?
Since the first lockdown, the restrictions on car dealers and showrooms have eased, meaning that click and collect or delivery purchases are still permitted to continue.
Nearly a year since the first lockdown, dealers have now had time to adapt to the new circumstances and put processes in place in order to allow them to still make sales during the lockdowns.
But what sort of impact have these made and how are dealerships finding business right now.
As automotive experts, we deal with hundreds of dealers every week and like to find out how they are managing things.
Our most recent feedback has consisted of reports that larger dealers are now accustomed to the new normal and business continues on as usual in this new no-contact way. However, smaller dealers with one or very few sites are finding it much more difficult to manage.
Why is this?
Well, it seems that used car stock is becoming quite difficult to come by. The demand for used cars has risen meaning that supply is becoming more expensive.
With people having more time on their hands, website traffic is generally up across the board as people browse the used car market.
Car Dealer has revealed that “the top 200 car dealers saw sales rise by 10.5 per cent in December, compared to November’s lockdown”.
The struggles dealers are experiencing is intensified by the fact that new car sales are slow, partly because of demand but also due to supply problems with manufacturers as they struggle to move parts across borders due to Covid restrictions. In addition, retail part exchanges are few and far between.
Not all doom and gloom
Despite troublesome news for dealers, there are still some silver linings. Thanks to the furlough scheme, many non-essential employees are not working, reducing the overall costs for the dealers. In addition, a backlog of MOT’s and service bookings are keeping dealerships busy.
We hope that the automotive industry can bounce back from what has been a rollercoaster last 12 months and that despite threats of tighter restrictions threatening click and collect services, dealerships can continue to do business in 2021.
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