There is no question about it: The COVID-19 Pandemic has absolutely wrecked the world economy, driving up unemployment and limiting business sales. Stay at home orders, sick customers and a general sense of fear have all dramatically limited economic activity in today’s world.
However, even so, many aspects of the economy continue to go on, and the job of many businesses has been to adjust to this new world. Car dealerships are a great example, as people who drive still need cars and have to shift towards virtual models, social distancing and navigating conflicting legal requirements.
As such, here’s a look at how car dealerships are continuing to operate during these very difficult times.
Meeting Legal Requirements
All fifty states have issued some form of different stay at home orders, shutting down schools and certain businesses in order to stop the spread of COVID. As such, all states have a different set of rules, and these affect car dealerships differently.
In some states, car dealerships can no longer physically operate, although remote operations can continue. For example, in Pennsylvania, car dealerships cannot operate their physical locations. In other states, like South Dakota, car dealerships remain open for business, but customers have absolutely begun showing up for test drives less.
For car dealerships, the challenge is learning the legal requirements of their various states and localities. However, even if their showroom is not required to close, many dealerships are finding that customers are simply not interested in buying a new car in the middle of a pandemic.
Instilling Customer Confidence
In areas where showrooms are allowed to remain open, car dealerships have been forced to go out of their way to discuss ways that they are keeping their staff and customers safe.
As a result of COVID-19, many car dealerships are using their websites to discuss the various ways that they are cleaning their showrooms, disinfecting cars after use, wearing masks and practicing appropriate social distancing. All of this, of course, is part of an effort to continue to remind customers that they can continue to safely buy new cars.
Many car dealerships are also offering solo test drives, a relatively new experience for car dealers. Furthermore, dealerships are offering to deliver cars to someone’s house at no additional charge, further limiting the requirement that people interact face to face.
Operating Essential Services
While some states have shut down customer showrooms, in every state, car repair shops continue to operate as essential services. As a result, many car dealerships have been able to operate these repair shops in order to continue to serve their customers. However, even then, they have been forced to embrace enhanced cleaning procedures, wear face masks and maintain appropriate social distance.
Conducting Business Virtually
In many areas, car dealerships are not allowed to keep physical locations open. As a result, they have shifted to virtual models, sending pictures, conducting tours and answering questions via phone or Email.
Additionally, car dealerships are increasingly relying on websites and videos to give customers updates about the cars they are using. Some car dealerships are offering interactive videos or 360 degree tours of their cars.
Changing Pricing Strategies
As noted in this USA Today article, car dealers are offering massive discounts to keep customers coming into their stores. Unfortunately, for many dealerships, this isn’t enough. Broadly speaking, car companies have seen their stock prices tank as a result of lost revenue and a decline in sales. The good news is that the demand still exists, and in many cases, car dealerships will likely enjoy a recovery when the economy does finally reopen. However, the economic strife that has taken place will almost certainly result in lost revenue and continuing sales challenges for dealers. This, of course, will likely result in a major shift in pricing strategies and force innovative new plans for car dealerships.
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