THE National Franchised Dealers Association (NFDA) as called on the government to provide support to motor dealers affected by the outbreak of the Coronavirus.
NFDA Director Sue Robinson said the retail automotive sector employs 590,000 people in the UK and businesses must be protected through supportive fiscal measures during the outbreak.
The Association has written a letter to the Chancellor of the Exchequer Rishi Sunak and Alok Sharma, Secretary of State for Business, Enterprise and Industrial Strategy, to urge the Government to support retailers.
NFDA is concerned that the Government is only targeting support at one group of businesses, small to medium enterprises (SMEs).
It outlined that franchised vehicle retailers pay very high levels of business rates and operate on much tighter margins than most SMEs, with an inherent high fixed costs exposure including rent, business rates, VAT and wages.
As a result, NFDA recommends that:
- Temporary business rates relief be extended to all retail businesses, regardless of their rate bill
- The British Business Bank be authorised to extend the Coronavirus Business Interruption Loan Scheme to any retail business, regardless of size
- Statutory Sick Pay (due to Coronavirus) relief should be provided for the first two weeks to all retail businesses, regardless of size.
Robinson added, “The impact of the virus is going to be felt across every part of the economy and especially in the retail sector.
“Revenues from vehicle sales and services will not only be impacted by the introduction of social distancing measures, but also by the widespread shutdown of European car and parts manufacturing.
“There is a real danger that if the Government is only targeting support at one group of businesses (SMEs), some big businesses will fail, causing business interruption in any case for SMEs that contract with them. The automotive retail sector needs to be protected regardless of size.”
Car and van dealers could turn more to online sales to help business as showroom footfall slows.
iVendi Chief Executive James Tew said that in the event that consumers were either afraid of visiting showrooms because of wanting to avoid unnecessary human contact or effectively confined to their homes, online could still provide an effective route to market.
He said: “We’re raising this subject with all due sensitivity but, in the event that footfall to dealerships falls dramatically, businesses need to find a way to keep functioning as normally as possible. Moving more sales online is a potential solution.
“There is a potential parallel to the existing situation. We know that when people are sitting at home for extended periods, they shop online. Every year, across Christmas and New Year, usage of our platforms increases dramatically.
“Now, we’re not glibly suggesting that a pandemic is the same as a public holiday. It’s not. But there are lessons to draw. People with money to spend may well want to shop for a car, van or motorcycle at the most unlikely times.”
Tew said that step one for the industry over the next few days was to maximise the online presence of each dealership but there was also a need to consider how the fulfilment side of the business would work.
“Really, this is the time to ensure that, in terms of the online motor retail facilities that you offer, you have your house fully in order. Effectively, you need to be able to allow the customer to choose and finance their car online as a minimum.
“Then, you have to look at which aspects of the deal can be handled remotely that are currently undertaken on a human level. For example, can you put a process in place where someone can show you their part exchange via their mobile phone – for example, through a Facetime call?”
However, Tew said there were unavoidably some areas that would involve person-to-person contact that would need very careful management.
“It seems to us that there are some points in the process of selling a car where some human contact is probably almost unavoidable, such as test drives and vehicle collection, and obviously the health of both employers and consumers is paramount.
“We would fully urge following official advice although we would also note that currently, there is no discussion that home delivery services are curbed and there is nothing to stop the dealer taking the vehicle to the consumer, especially if steps have been taken to ensure it has undergone an extensive cleansing process.”
Coronavirus is bringing severe economic headwinds that could be fatal to SME brokers that still rely heavily on manual processes or face-to-face interaction.
However, there are those who turn this to their advantage by ensuring they have the kind of robust digital infrastructure that can help them – and any business for that matter – survive and thrive even in this unprecedented situation.
Daniel Layne, Founder and CEO of Quotevine, said: “I would recommend all brokers ensure that webconference, e-signature, soft-searching, open banking and modern collaboration tools are part of their armoury.
“This is the time for them to honestly evaluate their capability for distributed working. Legacy computer systems that can only be accessed on-site or using slow and frustrating remote desktop solutions will prevent or severely limit productivity.
“If they haven’t already, brokers should move urgently to a cloud-native suite of applications that employees can access from anywhere. This is a perfect opportunity to adapt the way they do things and come out of the other side stronger.”
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