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What’s next for car dealerships?

The move towards electric cars is going to be a shock for many car dealers, according to a new survey.

While they are generally satisfied with the manufacturers’ plans to introduce battery electric vehicles and hybrids, they are far less happy about their dealership costs and how they are going to make money out of them in the longer term.

Already coping with new restrictions surrounding working with coronavirus-19 and dealing with customers, the dealerships are embracing many more on-line solutions to contact, selling, buying and servicing vehicles.

Dealers who embrace active contact like telephoning and emailing or texting customers has paid off in the first two months of lockdown with sales and service work coming through businesses. Those who simply closed doors and pulled down the shutters have seen business collapse and it’s going to be a struggle to restart.

When and how customers return is going to be a challenge and dealing with them even tougher. The Independent Garages Association is introducing a safely certified scheme for members to display at entrances and on websites in June.

Helpfully, the National Franchised Dealers Association and Society of Motor Manufacturers and Traders have worked to ensure all showrooms are safe spaces for employees and customers.

The best-practice guidance covers the entire customer experience, from booking appointments to showroom interactions, test drives, click & collect, part exchanges and aftersales, and includes advice on staff training, signage, sanitation and protective personal equipment.

Developed together with dealers and manufacturers, it is designed to complement government guidance for the overall UK retail sector, to help dealers of all shapes and sizes implement legal requirements as part of individual risk assessments in line with their unique business and customer needs.

The news follows the publication of government guidance to help businesses across all sectors get back to work safely. While workshops and vehicle deliveries have been allowed to continue throughout the lockdown period, the closure of sales premises has had a devastating effect on the entire industry, with the new car market falling -97.3% in April.

This forced factories across the UK, also impacted by lockdowns in global markets, to halt production. The industry body has campaigned and called for car showrooms to be re-opened as a matter of urgency to help drive customer demand and this will happen on 1 June.

Their closure has cost HM Treasury about £61M a day in lost revenue when shut. Automotive retail employs 590,000 people and turnover from sales of cars is £150 billion annually. Car sales in April fell by 96 per cent and expect similar results in May and they have told Close Bros Motor Finance that they are struggling to survive and want emergency financial assistance extended.