As car dealers across Australia brace for a sales slowdown amid coronavirus shutdowns, they have already begun lobbying state governments to be classified as “essential services” and be allowed to stay open during the crisis.
The Australian Automotive Dealers Association (AADA), which represents 60,000 employees across 3500 showrooms nationally, says parts and service departments in particular should be allowed to remain open as more people shift to cars as they seek to avoid public transport.
There is also the issue of the Takata airbag recall campaign, with more than 78,000 cars ordered off the road plus more than 250,000 vehicles yet to have their potential deadly airbags replaced, as well as numerous other recalls.
A letter written by the AADA and addressed to all state premiers, a copy of which was obtained by CarAdvice, says: “We would highlight the critical role of servicing and repairing vehicles in maintaining essential services during the emergency.”
The letter continues: “This judgement is supported by the US Department of Homeland Security including ‘automotive service and repair’ among the list of Critical Infrastructure Workforces on 19 March 2020.
The AADA says parts and service departments are “critical” to maintaining road safety.
“We would further note that our work in effecting the Takata airbag recall is due to be completed by 31 December 2020, and that a number of other recalls, both critical and advisory, are currently under way,” the AADA letter says.
“These recalls are vital in maintaining public safety but can only be finalised if our service and repair departments continue operating through this current emergency.”
James Voortman, the CEO of the AADA, said the decision to keep showrooms open would be up to individual dealers.
A number of large metropolitan dealer groups that CarAdvice has spoken to say they plan to keep operating – if allowed – but would resort to asking workers to take annual leave before considering job losses.
March is historically the second-biggest month of the year for new car sales – because it is the lead-up to the end of the Japanese financial year – and large multi-franchise dealers have told CarAdvice they are tracking reasonably well, however many have expressed concern about a possible downturn in April, one of the weakest months of the year for new-car sales.
“We are tracking okay for now, we’re able to keep the doors open, but we’re genuinely worried about April,” said the veteran multi-franchise Sydney dealer. “Like everyone else, we hope this bloody crisis is over and done with.”
In the meantime, some finance companies are offering dealers relief in the form of lower interest rates or reduced fees, and most leading car companies are allowing dealers to manually order replacement stock rather than forcing them to commit to a larger number of cars than what they can comfortably sell.