New-car showrooms and used car lots across Australia remain open – some with reduced hours – however the Australian Automotive Dealers Association (AADA) says many will soon need some form of government assistance to keep operating.
“Unfortunately, car dealers don’t qualify for many of the federal government’s stimulus packages because of their high turnover and staff levels,” said James Voortman, the CEO of the AADA.
“Governments need to understand that new-car dealers operate on very low (profit) margins and turnover alone is not a metric that can be used to determine their survivability in such adverse trading conditions,” he said.
With that in mind, the AADA has written to state and federal politicians offering to provide them with more insight into the car industry, to help them formulate a fair assistance package.
“What we are saying to governments is please talk to us when designing and delivering these packages,” said Mr Voortman.
“Dealers are big employers, pay large amounts of taxes and duties and operate as generous and upstanding corporate citizens in the communities they serve. Dealers have never asked for a handout before, but need all the help they can get now, if they are to survive” he said.
Australia's new-car sales figures for March were relatively strong – down 17.9 per cent versus the same month last year – compared to other major markets. The world’s two biggest car markets, China and North America, each posted downturns of about 80 per cent for the month.
The industry is being cautious about April, however. Industry insiders say the March figures were driven by a strong order intake in February, but the reduction in showroom traffic in the last two weeks in March could lead to a further slowdown in April.
Many car dealers have switched to “contactless” enquiries over phone or email for sales, finance applications, and trade-in valuations, but not all consumers are up to speed with these options.
“With state and federal governments issuing advice strongly discouraging the public from leaving home, (the number of people) visiting dealerships is severely restricted,” said Mr Voortman.
“New-car dealers across Australia have mostly managed to keep their doors open and service the needs of their customers, but we are concerned the impact of the coronavirus will push some dealers over the edge.”
As reported earlier, car dealerships – for new and used vehicles – and parts and service departments remain open as the industry is regarded as an essential service for both road safety and transportation.
As more members of the public shun taxis, trains, buses and ride sharing services, more people are relying on the comfort and convenience of their own cars.
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