COVID-19 Update: Trends & Economic Predictions from the Experts

By Desiree Homer

What Dealers Can Expect from the Market Right Now

As the country ventures to reopen, we’re starting to see more and more economic predictions from the experts. Without a crystal ball to know for sure, dealers can still be mindful of current trends and suggestions as they make plans for the future of car sales and operations.

More Car Buying, Less Public Transportation

Trends in a reopening Europe are showing that many consumers are showing concern about risks associated with public transportation. In lieu of their pre-COVID-19 mass transit preferences, people are choosing to drive themselves back to work, to market, and in public. One essential worker in Beijing shared in an interview that he prefers sitting in an hour’s worth of traffic for his commute, rather than potentially exposing himself for half the time on the crowded trains. In Germany, Anna Pawliczek says she’s driving herself to work for the first time ever to avoid the masses. Added incentives for self-commuting movement, include the low gas prices right now. People afraid to take risks with public transportation can mean more driving and car buying in the coming weeks.

Working Remotely Works

One thing many dealers have learned during the pandemic is that employees were capable of getting things done from home. When forced to embrace a remote workforce, retailers soon realized that productivity levels could still be maintained. Of course, in your service department, you need technicians on-site for work. But for sales, digital marketing, and administrative roles, working from home seems to have worked well. In NADA’s recently released guide, home-based offices are encouraged in practicing socially distant customer engagements. Some experts are predicting the remote working environment for many, could be worth implementing for some positions in the long term.

All of Your Eggs in One Online Sales Basket

In a recent podcast with Dave Cantin, Michael Brown of the Empire Auto Group in Huntington, New York, weighs in on his COVID-19 operations experience thus far. He suggests that while many experts predict a digital-only sales culture as a lasting trend, there will still be a need for community connection. Brown says, “I’m not sold that online sales is the way.” His dealer group expanded in supporting his local markets, in a way that helped him see 74% of his normal sales, despite being in one of the nation’s viral hot spots. Relying exclusively on a remote-buying platform may pose a challenge to that personal and community connection, most dealers rely on for increased business.

Car Buyer Needs & Financing Challenges

As the automakers roll out relief options and buying incentives, dealers should be prepared to run into lending and financing challenges at the car buyer level. People may need vehicles, but if they’ve defaulted on their payments, lost employment, or are unable to present cash down, financing could be a problem. Some experts are predicting that lenders may have to rework their guidelines to accommodate a financially strapped consumer public. At the dealership level of engagement, not getting someone financed means losing the deal. Lenders may offer assistance over the next few weeks or months, but dealers can certainly be discussing the predictions with lender partners now.

It’s hard to say if these economic insights will stick permanently or if they’ll change by the end of the week. What is consistent is that car buying will be dictated by consumer confidence in returning to their everyday shopping habits, as well as their financial position to do so. Staying on top of what your customers need and want locally may depend entirely on your market.