NAVIGATING A PATH THROUGH COVID-19

AADA appreciates that in this difficult time, our partners are offering useful suggestions for strategies Dealers can adopt to cope during this unprecedented crisis.

On 30 March, Deloitte Motor Industry Services hosted an online webinar to detail their view on the current situation, mainly concentrating on the JobKeeper Payment. More than 400 people tuned in to listen.

Several key Deloitte personnel, including Grant Cameron, Sam Venn, Spyros Kotsopoulos, Matt Donnelly and Sarah Fregon, spoke about a number of the measures released by the Federal and State Governments designed to keep money in businesses’ pockets and to provide needed credit lines where required. These included:

  • Boosting cash flow for employers
  • Supporting apprentice and trainee jobs
  • Supporting the flow of credit
  • Other State measures

Deferral of liabilities

According to Deloitte, the ATO and governments also recognise that small and medium enterprises (SMEs) would be better served in redirecting their cashflows towards maintaining business operations, and are thus allowing:

  • ATO and State Revenue – deferral of tax liabilities
  • Other State measures.

Investment opportunities

Whilst the majority of the measures are aimed at keeping businesses afloat, governments also recognise that businesses must continue to plan for a better tomorrow:

  • Instant and accelerated asset write-off
  • Various State measures.

Joel Shashoua, Director, Motor Industry Services at KPMG, suggested that in managing their businesses through the COVID-19 pandemic, Dealers should consider two main factors:

  1. How do I conduct my business is a safe way for my employees?
  2. How do I maximise any chance of earning revenue during this period?

“Communication is critical in times of uncertainty,” he said in a statement. “If you leave a void of information people tend to naturally fill it with rumour and it’s usually all bad news. Set up robust communications channels that people can rely on. This could be a daily email at the same time each day, conference call or a notice in the workshop.

“Be open to suggestion. As the owner or manager you do not have to have all the answers. Have brainstorming sessions if you need to work out complex problems. The answer may come from an unexpected source.”

Create a task force

“For large organisations a task force can be a representative group of people to manage the crisis including communicating ‘up the line’,” Mr Shashoua said.

“Determine any role that can work from home. There are not many roles in a dealership that can work from home. Some administration tasks can as long there is a carrier system that can deliver the work to that person. i.e. parts driver takes deals to process to admin clerks house.”

Consider the ‘Teams’ approach

“Large organisations including KPMG are employing a team’s approach. Put simply the workforce is split into two teams with each one working either in the office or remotely for the week and then they swap. This ensures continuity of service to our clients and greatly reduces the chance of spreading the virus. The added benefit of this is having half the workforce not using public transport.”

Protect those who can’t work from home

“For those roles that can’t be done remotely consider protection protocols such as rearranging the workspace and maintaining a distance from the public. Make available protection equipment. Scheduled sanitising for workspaces,” Mr Shashoua said.

Maximising revenue during a virus pandemic

“In recent conversations with our clients we have found that many Dealers are still being visited by customers, particularly in the service department,” Mr Shashoua said.

“With the announcements recently by the Prime Minister, Scott Morrison, it seems to be the view of the government that a total shutdown of business is not the preferred approach. It is therefore fair to think that Dealers will have the choice to continue to operate as usual each day. Considering that very few of Dealer expenses are variable (increase or decrease with revenue) the cost of business will need to be covered as much as possible during this period whether revenue is created or not. Therefore dealers need to maximise every dollar of revenue available to them.”

Mr Shashoua also outlined the following points to consider:

  1. If a customer walks in to look at buying a vehicle, they are serious. Treat them like royalty. Thank them for coming in and spend as much time with them as they need. Now more than ever the term ‘Tyre Kicker’ is redundant. Your manager needs to meet each one of these precious customers and ensure they are given the right experience and every opportunity is made to facilitate a sale.
  2. Ramp up your online activity. Many customers will be at home constantly monitoring social media channels. Tap into these channels and monitor closely so that customers can interact directly with someone at the dealership.
  3. Customers who enter your dealership will most likely want a large discount or a ‘win’ given the environment. The biggest win they can get is the ability to buy the car. All cars are imported, factories overseas are closing, and stock supply shortages will begin and run until Christmas at the earliest. Therefore if they would like a new car, you have one available they that can buy car today. No-one was worried about toilet paper 3 weeks ago!
  4. Service is still strong and customers who are working from home have more time than usual to get their cars serviced. Customers may wish for their vehicles to be picked up and dropped off. Best to find a way to make this happen. Salespeople can be used to assist. Ramp up your service booking calls. Make sure they are calls not emails or SMS as a personal touch is more important now than ever. Offer a discount if need be to bring in the bookings.
  5. Buy used cars. Don’t miss any purchase opportunity and if necessary pay overs for them. Without a guaranteed supply of new vehicles, used cars will become sought after and a lower average GP is still better than trying to sell thin air.

“As we progress through this pandemic the fluidity of the situation will require us to adapt and overcome – something our industry has done time and time again,” Mr Shashoua said.

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