The coronavirus pandemic has put the brakes on — but not completely stopped — auto sales in the state.
Colorado auto dealers got a break Friday from the governor’s stay-at-home order, allowing them to sell vehicles online for delivery or pickup from their service departments, which remain open under the order that shuts down nonessential businesses.
Dealer sales operations initially were not exempt from the order but won approval a day after it was imposed to allow for online sales, said Tim Jackson, CEO of the Colorado Automobile Dealers Association. The industry successfully argued that medical, public safety and other critical workers need to be able to buy a vehicle if their current vehicle can’t be repaired or is totaled in an accident, and that sales between individuals were still allowed.
The exemption preserves a few of the jobs of the 9,000 or so people who work in dealer sales operations in the state, Jackson said. Many dealers have extensive online sales operations, but some of the details on how those sales are now conducted, such as test drives, must still be worked out in coming days, he said.
“The showrooms remain closed, so the transaction has to be done online, either on the internet or over the telephone, with delivery either at the customer’s home or at the dealer’s service department with appropriate precautions,” Jackson said.
“I think the job losses statewide won’t be a lot less than 9,000 working on the sales side, or nearly 40% of the workforce for our 260 dealers. The rest work in parts and service.”
New vehicle registrations, the best measure of sales, were off 1% in January from a year earlier, the latest month available from the dealer trade group. In El Paso County, registrations were down 11.9% in January from the year before, but up 40.6% in February, according to data provided to the University of Colorado at Colorado Springs Economic Forum by Colorado Interactive.
March will be a different story — Jackson estimates sales of new vehicles will be off 30% to 40% from a year earlier, with a smaller drop for used vehicles, as a result of the spreading virus. That decline will take a while to show up in the registration numbers, since buyers have up to 60 days to register a new vehicle and motor vehicle departments across the state are shut down to all but online transactions.
Kevin Shaughnessy, vice president of operations for Phil Long Dealerships, said the Colorado Springs-based company launched an online sales operation six years ago called Carcierge that allows customers to search the inventory of all 25 Phil Long locations and communicate with a salesperson either online, by telephone, via email or by text. The process is designed so buyers never have to go the dealership’s showroom, he said.
“It works the same way as takeout or food delivery. We didn’t have many takers early, but remote selling has become more popular, especially in this environment,” Shaughnessy said. “The process typically starts when a customer sees our website or TV commercial that directs them to an 800 number, and the lead is sent to the individual store” for a salesperson to work with the customer throughout the process.
The salesperson can send the customer online links to recommended vehicles or let them see the vehicle through an iPhone Facetime call or video chat. If the customer wants a test drive, they must enter their driver’s license on a secure portal (for security) and the vehicle will be delivered to their home and picked up after in a way that maintains the recommended 6-foot social distancing, with a thorough cleaning before and after the test drive.
After the customer agrees to buy a vehicle, much of the paperwork is signed electronically and any documents that need a physical signature are sent to the customer overnight. The vehicle is thoroughly cleaned and then delivered to the customer at their home or picked up at the dealership’s service department; the dealership emails links to demo and tutorial videos on how to use the vehicle’s features.
Phil Long has furloughed about 30% of its sales staff, or about 50 people, since the dealership was forced to close its showrooms. The dealership employs about 1,100 people at locations in Colorado Springs, Denver, Glenwood Springs, Trinidad and Raton, N.M.
“It feels like I’m in the 12th round of a 65-round boxing match. I’m still standing, but there is a lot of fight left in front of us,” Shaughnessy said.
John Adams, general manager of Heuberger Subaru, said sales at the Motor City dealership have dropped to virtually zero but that March is typically a slow month for most dealers.
The dealership hasn’t furloughed its 205 employees, though many have been shifted temporarily to other duties while the stay-at-home order remains in effect. He said Heuberger’s internet sales operation typically handles more than half of its sales
Contact Wayne Heilman 636-0234