Now that the country has officially been put on lockdown following the COVID-19 outbreak. Everyone, including car dealerships have had to close doors. What has the impact of this been on the automotive industry, specifically car dealerships? Are businesses quickly adapting their online business models and marketing tactics? Are car dealerships building new and creative ways of engaging with their customers online. Are car dealerships thinking about Automotive Digital Retailing even more than ever?

I recently spoke to two successful car dealers (here’s the link to the full show): Bobby Petkov (DP – MitMak Motors) and Cecilia Reis (DP – Raceview Motors), and we figured out that whilst the entire world has changed in the blink of an eye – there is opportunity for car dealerships that can still keep them ahead of the game. It was interesting to see how these changes can positively impact the car dealerships future once we (un)lock the COVID-19 lockdown. 

Keep your staff informed and engaged at all times

People are the most important part of your business. Paying them first is critical, above all else and there is nothing more important than keeping your staff engaged and informed at all times. With uncertainty, comes fear of the unknown. We all know that the automotive industry is one of the hardest hit during this period. We as the automotive industry, car dealerships included, contribute almost 7% to South Africa’s GDP and we account for 30% of SA’s manufacturing output, whilst employing over half a million people nationwide, it is imperative that car dealerships act swiftly and with haste so not to injure staff and the economy. By playing your part in educating and keeping employees engaged by creating work during this time, you know that both the employees and families are kept safe. Some car dealerships have made provisions to set up remote working environments for their sales teams along with F&I representatives to ensure that business still continues during the COVID-19 lockdown to drive sales pipeline and secure future deals. All this using Automotive Digital Retailing strategies. 

Car dealerships that evolve QUICKLY are successful

We noticed that forward thinking car dealerships that are evolving are the ones who will be successful even after the COVID-19 lockdown in South Africa.

How? Those that employ Automotive Digital Strategies. Example: making sure car dealership digital platforms, internal systems and websites are set up to shift internal processes digitally online for you staff. Then creating consumer facing online processes. This means you can build car dealership sales pipeline and the car sale is potentially not lost. Start with simple changes giving the car buyer visiting your online car dealership showroom the ability to choose a vehicle, submit finance & FICA documents online in as few steps as possible to get them closer to finalising a deal. This isn’t possible however, without moving internal processes online for you staff also. This part the consumer doesn’t see. Remember the definition for Automotive Digital Retailing: Marrying the shift in internal car dealership processes online with online consumer experiences and processes is the key.

This for me shows that dealers are being forced to increase the pace of employing Automotive Digital Retailing strategies as a result of the COVID-19 South African lockdown. The question that lies here is: Are car dealers doing it right and is there room for improvement? Can we get all but deal fulfilment online by the end of the 21 days? I.e. ‘how do consumers take delivery of the vehicle?’ 

Consumer engagement is key

Car dealerships are still receiving enquiries on their cars, filling the pipeline. And, there are deals being done. There is still search activity on AutoTrader so you are rest assured that consumers are still looking for cars.  There has been a decrease in search activity across both AutoTrader SA and car dealership websites but the sense is that those consumers submitting enquiries are very lower funnel and serious. 

Dealerships that also employ customer centric Automotive Digital Retailing strategies are the ones who will win. These are serious buyers who are yearning to be engaged with. What is your dealership doing to keep them interested, build sales pipeline and partly close the deal during COVID-19 lockdown? 

Raising debt for your business is productive debt 

On the show we also had Darlene Menzies (CEO – Finfind). We heard that raising productive debt for your business operations at this time is a good thing vs. using personal debt used to finance a lifestyle. Small businesses should access/borrow money productive funds now when they don’t need it. Your financial standing as a business is in a better place now than when you’re in a crisis – businesses need cash and capital to be buoyant at a. time like this.

There are a couple of money lenders in the market outside of banks, E.g. private sector lenders. Government also has initiatives to get funding to help you get through this time. Take advantage of all the different types of relief out there as a small business e.g. SARS has PAYE Relief, UIF & banks. Visit Finfind for more.

After all is said and done, use your cash to look after your staff, they are the most important part of your business because without them, your business doesn’t exist. treat them well. In these times you have to be honest with your teams, keep them informed and to relay their fears as the COVID-19 lockdown period is unknown.

The car dealerships contractual obligations

Stan Dewey (Dewey Hertzberg Levy Inc) touched on contractual obligations during this period of uncertainty. There’s a legal concept called: Impossibility of performance and it’s this concept that changes everything in the “contractual” landscape. It deals with unforeseen happenings where it becomes impossible for to honour obligations. What does this mean?

On the consumer side, it may mean though car dealerships are able to secure deals online, you are still unable to make delivery of vehicles. The consumer may have agreed to the deal online, but unless he has “taken delivery”, the consumer can say that they don’t want the car anymore.

With that being said, the car dealerships and businesses still need to continue trading. It is imperative that car dealerships are transparent at all times with the consumer i.e. informing them every step of the way how processes have changed, how they can buy, when they will get delivery and how the financing will work. Because it’s that kind of information the car buyer will find more valuable now than ever before.

Uncertain times, call for optimistic-realists

As a car dealer, what then do you need to do? 

  • Don’t panic
  • As a leader show strength and vision, your staff need you to be level-headed
  • Come up with a plan of action that gives direction and communicate it, often
  • Build your future sales pipeline in order to secure future deals
  • Once lockdown is over, deliver on your promises
  • Keep communicating, over communicating is better than not communicating at all

The future post 21-days

So what’s next? What does the future of these two car dealerships look like post the 21 day COVID-19 lockdown?

It all starts by examining internal processes to ensure all staff are digitally savvy enough to deal with the potential car buyer online.  By enhancing digital training needs for staff, means dealerships will become efficient to help the consumer at a time that is convenient for the customer and not the dealer.

Secondly, critically looking at all your digital platforms and internal processes, what can you take from being a manual process to your websites and backend by building capture forms to ensure car dealerships provide online tools and information for your staff and the car buying consumer. Focus on your car dealership completing the transaction online, this includes F&I integration – all to make the car buying process seamless. Communicate the how you will fulfil the deal with the consumer post the COVID-19 21 day lockdown.

In my mind, I think the need for us as an industry to pull together is more imperative now than ever.

Automotive Digital Retailing is here, let’s embrace it!