Retail Auto Sector Shows Encouraging Signs - New Results From Monthly National Survey Nearly 75 Per Cent Of Dealerships Indicated They Are Hiring Back Employees As A Result Of The Canada Emergency Wage Subsidy (CEWS) Program
*TORONTO, ON / ACCESSWIRE / May 12, 2020 / *Findings from the Canadian Automobile Dealers Association's (CADA) national monthly survey regarding the impact of the COVID-19 health pandemic on automotive dealers shows promising signs for Canada's retail auto sector after nearly 8 weeks of decline. The survey saw 579 respondents, representing over 1,304 dealership rooftops across Canada, participate in the survey which was conducted from May 1-8, 2020.
"The difference in how dealerships are faring through this crisis is distinctly more positive from this time last month, and is a clear testament to the Government of Canada's strong business support programs such as the CEWS," said Tim Reuss, President and CEO of CADA. "The CEWS is working, it is helping support businesses through the COVID-19 crisis, and is keeping workers on payroll wherever possible. The CEWS has been so successful that dealers have been asking for the program to be extended and were very pleased when the Prime Minister announced the extension of the program last week."
Notable results of this month's survey:
· No dealership reported being completely closed (compared to a reported 11% closed in April's survey);
· 90% of dealerships said their service operations are open (up from a reported 77% in April's survey);
· 33% of sales operations are open by appointment only;
· 80% of dealers (up from 73% in April's survey) reported new vehicle sales revenue dropping by over 50% vs. 2019;
· Small improvement on the service & parts side with 36% (down from 40% in April's survey) reporting a revenue drop of over 50%.
"Vehicle sales had precipitously dropped by 75% to reach a historic low in April. This is clearly reflected in this month's survey with 80% of respondents reporting a drop in revenue of 50% or more throughout the month of April," said Oumar Dicko, Chief Economist at CADA. "While the federal government's financial support in response to COVID-19 has helped to mitigate the impact on businesses and workers, the country is now starting to look at recovery. The government must introduce a robust post-crisis stimulus plan to revive the Canadian economy."
Auto dealerships are included in nearly all announced provincial phase 1 reopening plans, and survey respondents indicated several measures that would be necessary to have a successful rebound of the retail automotive sector.
"For the automotive sector, the recovery plan needs to focus on boosting demand to jumpstart the industry," added Dicko. "Dealers are overwhelmingly in favour of a national scrappage program to help incentivize new vehicle purchases that are more fuel efficient. A GST/HST holiday for new vehicle purchases, coupled with a program aimed at increasing lending capacity for vehicle and equipment purchases such as a secured credit facility, was also called for by dealers responding to the survey."
For the first time, CADA also asked dealers about financial relief being provided by their banking institutions and their respective brands captive financing companies:
· 46% reported not yet receiving any relief from their financial institutions
Of those reporting to have received some support:
· 54% were very satisfied/satisfied with the mortgage relief;
· 57% reported to be very satisfied/satisfied with new & used floor plan arrangements;
· Only 32% are very satisfied/satisfied with the relief being provided on operating lines of credit.
"While the announced government support programs are good, it is troublesome that nearly half of respondents have not yet received any relief from their financial institutions," added Reuss. "Of those that have received credit support, it is concerning that only 32% are satisfied with the relief. We will definitely continue to monitor this situation, and work with government to advocate on behalf of dealers for expanded support wherever possible."
"Despite the ongoing revenue declines, dealers are continuing to be community leaders through their charity and service work," continued Reuss. "Dealers are stepping up to donate to their local food banks, helping deliver personal protective equipment to front-line workers, and providing discounts to emergency vehicle servicing and maintenance. We are very proud of the work dealers are doing to help support their community from coast to coast to coast."
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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