Pub. 19 2020-21 Issue 2

What are your thoughts about the auto industry and COVID-19?
I’ve been in the industry for the lion’s share of my career. No one has seen anything like COVID-19 before. It has been an unforeseeably trying time and has changed us in a way that I think is forever. Many of us expected to see a move away from traditional brick and mortar stores towards more digital engagement on what we thought was a horizon of 12 or 15 years. This pandemic and the absence of a vaccine has forced us to leap forward three or four years into that future as we wait for a vaccine to feel truly safe. The model going forward, at least-for the near future, is going to be on the internet and digitally-based. People will be talking by phone, not walking the lot in person as often as they were doing before. We will have to be more transparent as we won’t always be able to meet in person. The winners will be the dealers who are willing to be flexible and adapt to the new environment, which includes meeting the demands of new consumer behaviors.

COVID continues to impact how we live and work, and it does not look like this will change anytime soon. The significant changes to everyday behavior to keep our families, friends, and colleagues healthy and safe, can be confusing and downright frustrating. However, dealers and employees must continue to practice some basics to prevent the spread and a potential second wave that some medical experts are saying may happen as we head into flu season. Everyone can help by adhering to the basics. Enforcement in this area will help prevent a “second wave” and will be key in avoiding future shutdown orders.

The New Jersey new vehicle market got off to a good start in the first two months of this year, and then the bottom fell out when the COVID-19 crisis took hold in March. New vehicle registrations in the state declined 32.3% during the first six months of 2020, versus a year earlier, and tumbled by 53.1% in the Second Quarter alone. But all of that is now in the rear-view mirror. At this point, attention is squarely focused on what lies ahead.

Nationwide, dealers are moving to digital auto sales — ready or not.

It’s a big change from a traditional dealership structure that encourages departments to operate in silos, sometimes causing coworkers to compete with each other instead of the store across the street. As dealers work to simplify operations in today’s environment, it’s smart to take a closer look at how digital resources can seamlessly link different steps of the sales process through a single point.

COVID-19 has changed our world, and that certainly includes the auto industry. One impact is the emphasis now being placed on vehicle hygiene. With no end in sight to the current pandemic, we need to embrace an industrywide commitment to consumer and team member safety.

COVID-19 has delivered a gut punch to the
automotive industry, the likes of which we haven’t seen before, including mobility. And while there’s universal agreement the future is still fleets and ACES (Autonomous and Aerial, Connected, Electric and Shared), the path will be different from what we projected even six months or a year ago. Here are the ways I believe mobility will change — or stay the same — in the next 12 to 18 months.

In the short time coronavirus has impacted the global economy, cash has become the coveted asset in troubled times. Dealers should continue to develop plans for cash conservation as part of their overall business risk and continuity plan. If you are a typical dealer, you probably check your cash balance daily. Robust cash management buys valuable breathing space. Dealers must take a hard look and find ways to operate lean, save cash, and make cash last longer. Consider these ideas to maximize cash flow during the COVID-19 outbreak and beyond:

Traditionally, when an individual or organization fears change, it has something to do with digital technology disrupting their status quo. Will something autonomous replace my job? What if something is created that puts me completely out of business?

Earlier this summer, NADA Chairman Rhett Ricart wrote a column about how the manufacturer-dealership relationship was critical, especially when faced with unprecedented challenges, such as the COVID-19 pandemic that hit the industry hard in March and April and will continue to have a lingering impact on the auto retailing industry well into the future.

Governor Phil Murphy signed legislation (A4819/S2252) back in January, aimed at boosting the electric vehicle (EV) market in New Jersey. The bill provided $300 million in electric vehicle incentives for consumers over the next decade, as well as investment in an expanded charging infrastructure.