But the main problem for dealers is how to handle the loss of revenue. Online sales could be one option, but any orders would most likely have to be deferred until coronavirus restrictions are lifted.
Volkswagen Group’s dealership organization has given Europe’s biggest automaker an action plan to protect the businesses of dealers and service partners.
The dealer council is involved in a “very constructive exchange of information with all VW Group brands, Kuhn said.
“Basically, the manufacturers and importers have recognized the seriousness of the situation and are taking action,” Antje Woltermann, managing director of the German Association of the Motor Trade (ZDK), told Automobilwoche, a sister publication of Automotive News Europe. “However, that might not be enough.”
In its package of measures, for example, Toyota Germany has focused on securing liquidity for dealers. The Toyota credit bank has extended payment terms, simplified the granting of loans and supports companies in their business with commercial customers.
Hyundai Germany extended payment deadlines. In addition, individual premiums for sales to private or commercial customers are no longer paid monthly but weekly and regulations for keeping stock and demonstration vehicles will be relaxed.
Another open question is how to handle dealer sales targets. Hyundai Germany told Automobilwoche that metrics for achieving the targets in the first quarter and March were still being analyzed, and targets for the coming months would be redefined.
“Almost all manufacturers’ associations are working on topics such as advance payments and payment targets as well as the suspension of audits,” Woltermann said. “As far as dealer targets are concerned, manufacturers and importers must move even more strongly.”
CNPA, the French automotive trades association that also represents dealers, noted that the government has declared the coronavirus crisis to be a situation of “force majeure,” meaning that contractual obligations may be waived in many cases.
French dealers are sitting on about four months’ worth of stock, both registered and unregistered, representing a cash tie-up of 7 billion euros to 10 billion euros, CNPA President Francis Bartholome told the French automotive website Autoactu.
Bartholome said that discussions were underway with automakers.
Renault Retail Group said it is working with dealers to ensure they remain solvent.
The Renault subsidiary has a network of 275 outlets and sells about 20 percent of all Renault Group, which include budge brand Dacia, vehicles in Europe.
A spokeswoman said the details were still being worked out, but that Renault’s banking arm, RCI, was involved in the discussions, with both company-owned and independent dealers.
Christophe Michaeli, director of the French automobile market at BNP Paribas Personal Finance, said some automakers had set up emergency support systems.
Ivan Segal, Renault commercial director for France, told Autoactu that the automaker was going to extend invoice terms for dealers up to 120 days in some cases.
Adolfo De Stefani Cosentino, chairman of the Italian dealers’ association, Federauto, said most automakers have been “proactive in helping dealers face this difficult situation.”
Cosentino said measures taken so far included guarantees of first-quarter bonus payments, and deferral of invoices for demo and courtesy vehicles, and payments for parts.
Volvo Cars Italy, in a letter to dealers seen by Automotive News Europe, said dealers would get an additional 110 days to pay for cars already in stock, as well as those shipped between March 11 and April 3, and the company’s partner bank would grant 90-day extensions on invoices due in March and April.
Plinio Vanini, chairman of Autotorino, Italy’s largest dealer group, said that the expected economic hardship could force automakers to reassess the size of their dealer network.
“As we are seeing a worldwide recession, automakers will not be in a position to keep their entire dealer networks running,” Vanini said. “They might be forced to take hard decisions on the number of outlets they actually need.”
Renault Retail Group said last month that it would be closing some showrooms as part of a retrenchment of its operations, in part to prepare for expected growth in online sales.
Font: Automotive News Europe
