National Survey Shows Devastating Impact of Covid On Retail Auto Sector

Nearly 90 percent of dealerships see revenue drop in excess of 30 percent, and nearly 100 percent of dealerships reporting staff layoffs

TORONTO, ON / ACCESSWIRE / April 14, 2020 / Findings from the Canadian Automobile Dealers Association’s (CADA) national survey regarding the impact of the COVID-19 health pandemic on automotive dealers highlights both the staggering toll the pandemic is taking on the sector, and the ways dealers are supporting communities through the crisis. The survey saw 862 respondents, representing over 1,600 dealership rooftops across Canada, participate in the Survey which was conducted from April 3-9, 2020.

“Canada’s retail auto sector employs over 160,000 Canadians across the country and the impact of the COVID-19 health pandemic has been devastating” said Tim Reuss, President and CEO of CADA. “Just as dealers across the country should be entering the peak season, where Canadians are most likely to be out shopping for new vehicles with the latest safety and environmentally advanced technology, the retail auto sector is reporting its most severe decline in history.”

Most important results of the CADA survey:

  • 11% of dealerships are completely closed
  • 87% of dealerships have seen a revenue drop of over 30%
  • 50% of dealerships have closed on-premise sales operations (survey was conducted prior to Ontario’s newest directive)
  • While 77% of dealerships have been able to continue essential repair and maintenance work, nearly 40% have experienced a 50% drop or higher in service and parts revenue
  • 96% of dealerships have had to lay off employees, with 78% having laid off 10 or more people

“Most dealerships have had to partially or completely shut their doors,” added Reuss. “On top of that, they’ve implemented additional safety protocols that include increased cleaning and sanitizing, protective barriers and wearing protective gear – all while maintaining reduced hours of operation.”

“Despite these difficult times, dealers continue to be a vital part of their local communities,” continued Reuss. “They are supporting numerous local initiatives like delivering prescriptions and groceries, donating critical supplies like N-95 masks to local hospitals, and offering shuttle services or even donating entire vehicles to critical community support services.”

With the survey, dealers also identified additional key areas of support they require from provincial and federal authorities as well as the manufacturers they represent:

  • Deferral of property taxes
  • Waiving HST on sales for the next three months
  • Interest-free loan programs for all small and medium sized businesses, including those with a payroll exceeding $1 million
  • Clarity, transparency and increased availability of the Canada Emergency Wage Subsidy (CEWS) program, with an immediate cash injection to pay employees
  • Reinstating the Secured Credit Facility that was critical for assisting the sector in rebounding after the 2009 economic crisis
  • Financial assistance or support from government for upkeep of operational costs (utilities, mortgage/rent, heating, property tax, insurance, etc.)

“Dealers have made it clear they appreciate the numerous programs that have been announced so far to help support employees, but the survey results show how deeply the sector is struggling financially,” said Reuss. “We need additional business supports – mainly liquidity – to help dealers remain viable and continue to play a pivotal role in their communities during this crisis.”

The Canadian Automobile Dealers Association (CADA) is the national association representing new car and truck dealers. Our 3,200 members are represented in nearly every community and collectively employ 160,000 people across the country.

For more information please contact:

Alla Drigola
CADA Public Affairs
Telephone: 778-834-5517

SOURCE: Canadian Automobile Dealers Association

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