Crisis at the dealership: Corona as a challenge for the automotive trade

Whether retail or car dealership - the Corona virus has become one of the biggest health, social and economic challenges we have seen in Germany for a long time since March 2020. The Federal Statistical Office reports that because of Corona car dealerships had to report a drop in sales of 15.8 percent on average in the first half of 2020 compared to the previous year.

Dealers were not the only ones who had to deal with car dealerships being closed due to the Corona virus. Car suppliers and manufacturers also had to shut down their production facilities. Many consumers themselves had to fear for the loss of their jobs, expenses were reduced or postponed to a later date. So the question is: Are there alternatives for your car dealership in times of Corona?

The second lockdown: car dealerships closed again due to corona virus

In March 2020, what no one had expected became reality. Throughout Germany, the news was "car dealership closed due to Corona". Many locations had to record sales losses of more than 90 percent. In the course of the relaxation in May, car dealerships were also reopened. Nevertheless, it quickly became clear that Corona would continue to have a long-term effect on car dealerships and would lead to far-reaching changes.

Although Corona's car dealerships were able to recover somewhat over the summer, the next lockdown is now just around the corner as part of the second wave. On December 14, the Conference of Chief Ministers decided to close schools, retail and also car dealerships again, probably until January 10, 2021.

Current Corona rules in car dealerships and workshops

What does it mean for you specifically to keep your dealership closed because of Corona? Actually, the lockdown does not apply to systemically important businesses. What that means, specifically:

• The dealership will be closed until 10/01/2021 for Corona.
• Depending on the district, vehicle registration is possible on site, but is often associated with longer waiting times. Alternatively, vehicles can also be registered online.
• Despite Corona, the garage may remain open. Appointments and contactless vehicle handover are recommended.
• Gas stations are also open despite Corona.

From purchase to sale: Corona influences the value chain of car dealerships

Lockdown until January, as far as the current status - however, even head of the Chancellor's Office Braun currently leaves open whether there will be extensive relaxations again in the short term after the deadline expires from the beginning of January. Meanwhile, away from the political stage, it is becoming increasingly clear that the effects of Corona go beyond the dealership closing.

These three consequences of the Corona pandemic are showing up at car dealerships:

As a result of Corona, many car dealerships find themselves in a difficult situation as classic location-based companies and have to "rethink". We have summarized for you how you can deal with Corona at the dealership and better arm yourself digitally against the crisis.

Leading the way with digital tools: Car dealerships open despite Corona rules

The Corona crisis brought a boost to one industry in particular: online retailing! As a study by the German Association of Motor Trades and Repairs (ZDK) from 2019 showed, only seven percent of automotive businesses have a digitalization strategy. However, this contrasts with over half of car buyers who would be willing to buy a car online.

So the question is: How well are you digitally positioned to exploit this potential in your dealership despite Corona? Because with the help of a digital showroom, car dealerships remain open even when the branches have to be closed. This way, you can expand your online presence and effectively stand out from the competition:

• Your website: Become visible online with your own car dealership website and give your customers a contact point they can use even during the lockdown. With the AUTOMANAGER you can create your own website without IT knowledge in just a few clicks - even from your home office!
• Your online salesroom: Present your vehicle inventory online and give your customers the opportunity to take a tour from their sofa. With an app like the picdesigner you can create professional vehicle images yourself at low cost. With AUTOMANAGER's practical 3D configurator, you can even provide visuals if the delivery of the vehicle is delayed.
• Your online shop: Have you ever sold a car online? Car dealership software like AUTOMANAGER makes it possible. Thanks to website, lead management tool as well as the possibility to implement everything from financing to signing the contract online, you can accompany your customer from the first contact to the sale online.

This way you can reach your customers independently of the dealership opening during Corona hours and inform them about current developments such as the VAT reduction, new car discounts or the purchase premium for e-cars as purchase incentives.

Test drive with mask obligation: Car dealership in Corona times

Once your dealership is ready to reopen, it's important to ensure a trustworthy and Corona-safe shopping experience for your local customers. Software solutions can help you with this as well.

In addition to mandatory masks in the dealership and Corona hygiene concepts, you can digitally support the resumption of business operations in the dealerships:

• Inform online: Inform your customers on your website exactly about the implementation of hygiene concepts in your dealership. This way, they can prepare for a visit to your dealership with a safe feeling.
• Communicate contactless: Give your customers the option to contact you by phone or email at any time. Car dealership software such as AUTOMANAGER helps you to keep track of digital enquiries at all times via a practical app for your smartphone and never lose a valuable lead.
• Make appointments online: From test drives to workshop visits, you can use online appointment allocation on your website to effectively manage the flow of visitors to protect both your customers and your employees. This function can be easily integrated with the help of AUTOMANAGER, for example.

Our conclusion: Use Corona as an opportunity despite lockdown at the dealership!

The Corona pandemic has hit car dealerships across Germany hard. From disrupted supply chains to reluctant consumers to the closure of sales outlets in the wake of two lockdowns so far, Corona is a real crisis for the dealership, but one that also holds great opportunity.

The key word is: digitalization. While the automotive trade has relied on the point-of-sale business for decades, the current situation is clearly calling outdated business models into question. 

However, with the help of digital tools, you can address consumers' increasing willingness to buy cars online and never let a potential lead go to waste - whether you have to close your dealership because of Corona.

Do you need support in developing a digital strategy for your car dealership? We will be happy to advise you without obligation in a strategy meeting with our development team. Simply contact us at +49-561-789845-0 or arrange an online appointment.