How Many Car Dealerships Aren't Going To Survive The Coronavirus Outbreak?

You can still buy a car at almost any dealership in America at the moment, even many in the Bay Area, where there is a shelter-in-place order. But not surprisingly fewer people are doing that amid the global coronavirus pandemic. Dealers who have inventory still to sell are very much in wait-and-see mode, but the worst is still to come.

Take this quote from a general manager of a dealer in Fresno, California, where dealerships were ordered closed under the city’s shelter-in-place order, unlike the Bay Area where the shutdown order exempted “gas stations and auto-supply, auto-repair, and related facilities.”

MDarringer - 3/20/2020 11:01:02 AM

0 Boost

There will be more than a few that are not sustainable. With some brands already on life support, this will reduce the number of dealers out there. Because even if the dealer is a part of an automotive group--most are these days--an unprofitable arm is not carried long. This Chicken Little moment in our world will submarine a brand like Alfa Romeo that you can't give away on a sunny day. Nissan will have to incentivize its incentives. And so on.

Agent009 - 3/20/2020 12:11:44 PM

+3 Boost

Alfa would have done better in a Ferrari dealer network IMHO

MDarringer - 3/20/2020 12:26:49 PM

-2 Boost

No it wouldn't. The Alfa clientele is not a match. Then there is the stench of Alfa's lack of quality control. Ferrari does not need that.

Alfa needed to be co-branded in a wide number of dealerships rather than the stand-alone or stand-with-failing-brands (Fiat/Maserati) model they used. But FCA botched it by allowing the Giulia to arrive so not fully sorted out along with product that sometimes had to go to the body shop to fix build issues.

SanJoseDriver - 3/20/2020 11:59:04 AM

+4 Boost

It's going to be tough for everyone, the whole economy is going to slow down thanks to what we are doing today. Even tech companies where most people can still work remotely will see major drops in business due to uncertainty. There could be many layoffs, high unemployment, and years-long recession if we don't find someway to collectively fix this in the next month or two.

China is also coming out ahead as it is business as usual in many companies/factories there now.

jeffgall - 3/20/2020 6:00:12 PM

+3 Boost

In my business, we are building a private bailout mode to keep our independent distributors afloat. Independent distribution is cheaper to operate under normal circumstances than direct retail stores. Guessing the OEMs do not have that option given their financial status. Should be interesting.

ctsang - 3/23/2020 1:51:20 PM

+2 Boost

RIP stealerships