The coronavirus epidemic has started affecting U.S. dealers as fewer and fewer customers visit their lots, with even the most successful ones bracing for a major sales decline.
With the outbreak already causing plant shutdowns in Asia and Europe, and United States ordering closures for schools, pro sports leagues and other big events, dealers across the country are starting to feel the coronavirus impact, Reuters reports.
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“Sales are definitely falling,” said John Luciano, managing partner with Street Volkswagen in Amarillo, Texas, and chairman of VW’s national dealer council. “We’re waking up in a different world a little bit more every day.”
Customer visits at down 30 percent so far this month at Russ Shelton’s Buick GMC dealership in Michigan, which is also faced with a 40 percent drop in its service department. “When schools close, mothers get worried – and this stops economic activity,” industry consultant and former GM executive Warren Browne said.
Even dealers with strong sales are acknowledging this week as a possible beginning of a big sales slide. “It’s going to happen,” Beau Boeckmann, president of Galpin Ford in the Los Angeles area, said. “We’re kind of still in this odd wait-and-see moment.”
Officially, both Ford and GM are enjoying strong sales at the moment but spokesmen from the two automakers acknowledge that this could change in the next few days.
“We’ll have to see how long this crisis lasts,” GM spokesman Jim Cain said. “It stands to reason that sales would fall in some markets as people are putting basic needs first.”
Can anything be done to save the year?
If you ask Morgan Stanley analyst Adam Jonas, the Trump administration could look into the past and President Obama’s $3 billion Car Allowance Rebate System (CARS), colloquially known as “cash for clunkers“, which gave up to $4,500 to consumers to trade in their old, gas-guzzling vehicles to buy newer and more efficient models. However, some economic studies and reports of the time questioned its success claiming that it failed to dramatically increase sales.