COVID-19: Tough Times for Car Dealers, but Buyers are Still Around
Car sales have taken a huge hit during the first quarter of 2020 and an even bigger one in the month of April due to the COVID-19 situation, but it appears Canadian consumers’ intentions have not really changed.
According to a new survey by CarGurus, 87 percent of respondents said they planned to purchase a vehicle later than they had originally hoped due to the pandemic (usually four months or longer from now), but more than two thirds of them are still “actively researching” for a purchase.
Only 6 percent seem to have pushed off those plans indefinitely.
That’s why the website is claiming that “auto sales are delayed, but most are not lost. Many shoppers are simply waiting for normal economic activity to return, and are actively shopping online in the meantime.”
Across the country, consumer confidence indicators are starting to rebound slightly, but there is still a long road ahead.
Here’s another encouraging sign for the industry: 51 percent of survey respondents who said they use taxis or ride-sharing services and 54 percent of those who use public transit expect to use those services less or not at all when economic activity restarts. Among them, 42 percent reportedly consider buying a vehicle.
Dealers, meanwhile, are advertising all sorts of deals and incentives to attract potential customers as early as possible. And they desperately need them: according to the Canadian Automobile Dealers Association (CADA), 80 percent of its members said revenue fell by more than half in April.
Showrooms in Quebec and Ontario—two provinces that represent 80 percent of the Canadian new-vehicle market—were closed as a precaution for much of April. Many have now reopened, but essentially by appointment only.
CADA appreciates the efforts by the federal government to help mitigate the impact of COVID-19 on businesses, but they would like additional measures such as a national scrappage program, a GST/HST holiday on new-vehicle purchases, increased incentives on greener vehicles and increased lending capacity for vehicle and equipment.
The association claims 46 percent of dealers in Canada have not yet received any relief from their financial institutions.