COVID-19 Update: Michigan Governor Warns of Potential Shutdowns

By Desiree Homer

Dealers Should Be Prepared for Anything

Right now, dealers are trying to navigate their operations through a volatile used car market and a shortage of new inventory. The thought of another automaker shutdown mandate might only make matters worse on the availability of new models. But that is a potential risk on the table right now as Michigan Governor, Gretchen Whitmer, issues a stern warning to her constituents. Last Wednesday, Whitmer warned her state residents that if her mask-wearing order isn’t followed, she may shut down more businesses, including the automakers and production lines. Franchised dealers whose brands fall into Michigan territory, may need to brace for another reduction in new inventory. Or, at the very least, dealers need to be prepared for anything over the next few months.

Mask-Wearing Executive Orders

There is strong demand right now for new inventory, and the manufacturers are cranking up production to try and meet that demand. So, when Governor, Gretchen Whitmer, threatens to impose state-mandated shutdowns again, in response to a resurging of the Coronavirus, employees, manufacturers, and dealers worry. Whitmer said in her press conference that, “a second wave of this virus could be absolutely devastating.” Michigan hit a daily high for positive COVID-19 cases last Wednesday since May 14th. And rising cases aren’t just affecting Michigan. Headlines continuously cover the increased spread of the virus across other states, including Texas, Florida, and Arizona.

What More Shutdowns Would Mean for Dealers

Of course, if General Motors and Ford are ordered to shutter again in Michigan, franchise dealers representing those brands will see another shortage of new inventory. But additional commerce or business-related closures in other regions will force dealers to resort back to quarantine engagement strategies again. Regardless of how you feel the virus is impacting your market, the experts are warning that we just don’t know what will happen during the fall flu season and beyond. It’s a red flag warning now that dealers should be prepared for sheltering and furloughing, just in case.

The Market Could Be Sliding Backwards

Chief Economist for Cox Automotive, Jonathan Smoke, joins the Dealer News Today podcast conversation and discusses auto industry trends that are tracking right now. Smoke says while the data supports a strong recovery effort in recent weeks, it also predicts a potential backslide. “Car dealers need to prepare,” he says. Tune in to hear the insights and factors that suggest increases in COVID-19 cases could cause a reversal of car-buying trends, ultimately threatening the industry. For those dealers who aren’t prepared, a second wave of economic stalls and virus mitigation efforts could prove to be detrimental. How ready is your business to sustain another round of shuttering?

If the first wave of a pandemic taught dealers anything, it’s that preparation for the worst-case scenario, and quick adapting operation strategies can be the life preserver that helps them weather the storms. The analysis of today’s conditions means dealers should be cautious and, as always, prepared for anything.