Is the Coronavirus Outbreak Affecting Your Dealership?

By Canada Drives Newsroom | Dealer Services

The world economy has experienced sudden and nerve-wracking fluctuations from health scares before, such as the SARS epidemic in 2003 and the 2009 H1N1 flu pandemic. From a business perspective, the impact can be felt in dollars and cents. It's estimated that SARS incurred a $40 billion hit to the United States economy. The totality of economic damage that the COVID-19 coronavirus wreaks on the world remains to be seen.

Here at home, the coronavirus hasn’t shut down cities or incited panic in the masses. But there are ramifications, even for car dealerships. Certain brands are affected more than others and the virus is still in the early stages with more flux to come. Dealers should be aware of the challenges. Small, strategic adjustments can reap dividends. 

Which manufacturers are affected by coronavirus?

At this point, you can rest relatively easy. For the moment, Canadian dealers are largely unaffected by the outbreak as the normal supply surplus of vehicles and parts keeps everything moving. However, if shutdowns continue at important hubs in China like Hubei Province, it could be a challenge for some manufacturers to complete the assembly of some vehicles. 

For example, since most vehicles manufactured in China are for their own market, there likely won’t be many instances of vehicle shortages in Canada. That’s not definitive, though. For example, Hyundai’s Palisade production in South Korea shut down while waiting on parts from China – a model shipped to North America.

The more likely scenario is a parts shortage in North American assembly lines. General Motors, Volkswagen, Toyota, FCA, and most other carmakers on this side of the pond depend on everything from electronics and EV batteries to mechanical parts for final assembly. 

What dealers can expect

A prolonged shutdown or factory disruption in China could lead to modest declines in vehicle availability, albeit for select models. Right now, availability isn’t an issue for vehicle orders in any real capacity. 

More likely, the problem that dealers can expect to face currently and in the coming weeks and months will be anxious car shoppers. The economy has weakened and people are generally shying away from public spaces more than usual. It’s possible that fewer lot-walkers will be about and potential shoppers might be waiting it out before buying a vehicle.

Opportunities in the midst of a tough climate

Even with the global economical impact from the coronavirus, dealers can be proactive in pushing forward. It has to do with positioning the dealership well and being sensitive to the shopper’s needs.

1. Leverage your digital strengths

When the going gets tough in business, the initial instinct is to pull back from expenses. Doing so doubles down on the effects, digging the hole even deeper. When there’s economic adversity, successful dealers are committed to attracting customers.

When face-to-face interactions pose a risk, online interactions are an obvious preference. There are so many ways you can leverage your digital strengths.

2. Ramp up your sanitation efforts

Even if your cleanliness standards have always been exceptional, make sure you're following recommended protocols on testing and disinfection measures. And use your digital channels (social media, etc) to reassure your customers about the exhaustive precautions your dealership is taking.

3. Offer at-home test drives

For at-risk demographics like buyers over the age of 50, shoppers with pre-existing medical conditions, or anyone with a compromised immune system, waiting out the virus could be the preferred strategy. That means avoiding spaces like dealerships, but that doesn’t mean you can’t go through the sales process. 

At-home or off-site test drives are a great way to bring customers deeper into the sales funnel while catering to their concerns. They won’t need to expose themselves unnecessarily and they still get the vehicle they need.

Pro Tip: If the customer enjoys their test drive and wants the vehicle, a home delivery service removes a potential barrier to purchase. Deliver the car and give the customer the peace of mind of signing the paperwork in their own living room!

Canada Drives keeps high-intent leads coming

When the tap is turning off at other stores, keep your leads flowing with pre-qualified sales leads. With Canada Drives, customers can get approved for finance online—they don't need to leave their homes! That’s an attractive option, especially in the current climate. The customer only needs to deal with one dealership and knows exactly how much they can get financed, saving a significant amount of time for all parties.

Speak to one of our reps today to find out how we can help boost your dealership's bottom line.

Smart. Affordable. Reliable.

Start getting quality customers you can count on with Canada Drives today.

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