U.S. Auto Dealerships Ask Trump If They Can Stay Open Amid Outbreak

by Matt Posky

Published: March 20th, 2020

u s auto dealerships ask trump if they can stay open amid outbreak

Like every other business in the United States, auto dealers are attempting to implement changes that would allow them to operate safely amid the coronavirus outbreak. Undoubtedly petrified by the massive hit the Chinese car market took after COVID-19 reared its ugly head in Wuhan, they also hope to remain open while other business stay closed.

On Tuesday, the National Automobile Dealers Association (NADA) and Alliance for Automotive Innovation (AAI) issued a formal letter requesting that President Trump consider dealerships and service centers as “essential operations when federal, state, and local officials impose certain requirements due to the coronavirus outbreak.” While we’ve already seen dealerships embrace new tactics to comply with public health initiatives, it’s assumed they’ll be shutting down just, like most automakers plan to. However, retailers worry their diminutive cash reserves (in relation to manufacturers) won’t see them through a prolonged shutdown while the broader industry wonders who will repair automobiles during the pandemic.

From NADA:

These facilities perform needed safety recall repairs, manufacturer warranty work, and safety-critical maintenance, including brake repair, steering repair, and much more. And they provide replacement vehicles when necessary. We note that many local jurisdictions, when issuing closure orders for non-essential businesses, have included motor vehicle facilities on the list of those that are essential. For example, yesterday’s shelter-in-place order issued by the Health Officer of the City and County of San Francisco determined that “gas stations and auto-supply, auto-repair, and related facilities” were essential businesses outside the order’s reach.

Don’t get the idea that this is all about altruism. Plenty of dealerships are understandably preoccupied with survival; if they can help keep the United States driving, all the better. Trump has said he’ll assist the automotive sector, but it’s not clear what form that aid will take or which groups will take priority. Parts suppliers, automakers and dealerships are all asking for help — but so is every other business sector impacted by the coronavirus.

“We’re watching the auto industry very much,” Trump said on Thursday. “We’re going to be helping them out at least a little bit and they’ve sort of requested some help, and it wasn’t their fault what happened. So we’ll be taking care of the auto industry.”

Optimistic estimates see coronavirus-related shutdowns suppressing automotive sales by about 3-to-4 percent vs last year’s figures. That figure presumes the shutdowns are brief and the automotive sector enters recovery by the end of April. A prolonged shutdown would be much worse. Market analysts at ALG recently suggested that an extended national shutdown could have 2020 sales sinking almost 15 percent (vs 2019) — a shortfall of 2.4 million vehicles from the firm’s initial 2020 forecast.

Earlier in the month, LMC Automotive cut its 2020 global light-duty vehicle sales forecast by 4 percent, or 3.7 million units, as the “rippling impact of the COVID-19 outbreak creates significant uncertainty.” At the time, it was one of the worst estimates given, taking into account supply chain issues from China that hadn’t yet come into full effect. Days later, Morgan Stanley added its own research, predicting a 9-percent sales decline.

[Image: Gretchen Gunda Enger/Shutterstock]

#AAI #AutoDealerships #Coronavirus #DealerNews #NADA #NationalAutomobileDealersAssociation

Matt Posky

Consumer advocate tracking industry trends and regulations. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied, he pivoted to writing about cars. Since then, he has become an ardent supporter of the right-to-repair movement, been interviewed about the automotive sector by national broadcasts, participated in a few amateur rallying events, and driven more rental cars than anyone ever should. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and learned to drive by twelve. A contrarian, Matt claims to prefer understeer and motorcycles.

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4 of 98 comments

Namesakeone on Mar 23, 2020

Just what we need: An atmosphere where close physical contact (sitting close together in a car for a test drive, sitting across a small desk, shaking hands) is considered an element (though in the latter case, not a necessary) part of the job.

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Thelaine on Mar 23, 2020

I have always engaged you and anyone else civilly Freedmike, if given the same courtesy, and I continue to believe that the reason people are willing to burn down the economy in order to try to stop a virus which is less deadly than the average flu is because they are panicking and hysterical. Turn off the TV. Read this: https://www.statnews.com/2020/03/17/a-fiasco-in-the-making-as-the-coronavirus-pandemic-takes-hold-we-are-making-decisions-without-reliable-data/ https://science20.org/david-zaruk/20200320/coronavirus-shows-our-reliance-precautionary-principle-has-ruined-our-ability?utm_source=dlvr.it&utm_medium=facebook https://www.nytimes.com/2020/03/20/opinion/coronavirus-data.html Opening your mind to other opinions is the best way to stop the hysteria and panic.

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- Vulpine on Mar 23, 2020
  
  @thelaine: I just read your first link at StatNews and I agree with what it says; we really don't have all the facts and most seriously in my opinion, the US Government--or rather, the President--din't want those facts and for two of the three years he's been in office he has done nearly everything possible to prevent ANYONE from getting those facts as he has shut down or fired the doctors and scientists whose job it was to discover the facts through proper means. It even turns out that our President pulled an office out of China back in July whose sole purpose was to keep track of diseases there that could affect the American people--again, mere months before it broke out in Wuhan and has now spread into a global disease. Yes, I agree that some people are over-reacting; but they're over-reacting because they don't have the data they need to address the issue empirically. This disease MIGHT, under proper treatment, be "less deadly than the average flu," but it is NOT proving so, as actual numbers are showing the disease hundreds of times MORE deadly. Even that first link, while stating, "The one situation where an entire, closed population was tested was the Diamond Princess cruise ship and its quarantine passengers. The case fatality rate there was 1.0%, but this was a largely elderly population, in which the death rate from Covid-19 is much higher," also states, "We don’t know if we are failing to capture infections by a factor of three or 300." Simply put, until we know more about the disease and proper treatments, the early death rate is going to be higher on a detected ratio than the other flu viruses and that article, while not in so many words, says the same. Even that article assumes a death rate of three times that of the average flu at 0.3%. Again, we don't know enough about the disease and so far the only political entity that does is one our President is accusing of not telling us about it AFTER, he had gone out of his way to remove those offices that could have told him perhaps months BEFORE it even hit the US news. On a personal note about the sites you link, they come across as "alternate science" through their other articles. While they claim to be 'real' science reporters, somehow they manage to avoid referencing any sources for their data, which makes them as bad, if not worse, than the people they're criticizing.
  
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- FreedMike on Mar 23, 2020
  
  Hmmm...interesting stuff, but... If there is no "reliable data" on a disease, under-react to preventing it? OK...give me 100% reliable data on my expected lifespan if I smoke, eat out at McDonald's every day, and refuse to exercise. And good luck with that - it's impossible to predict reliably. Some people die in their 50s from that, but it's entirely possible that someone engages in that kind of behavior, lives to 90, and dies in a house fire, like someone's Uncle Joey did. It happens all the time. But what kind of idiot says, "well, it didn't kill Uncle Joey, so I'm gonna do it too"? And none of these articles, interesting as they are, explain how you prevent the spread of this virus - which is the reason behind all the draconian stuff you're talking about - without impacting the economy? Good luck with that one too. We have two choices: under-react or over-react. Clearly the over-under here is that under-reacting is going to cause more harm than over-reacting; if that was not the case, then we'd be under-reacting.
  
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