Dealerships in Italy, the epicenter of the viral outbreak in Europe, were the first to be affected, with the country’s largest dealer group, Autotorino, announcing last week that it would close showrooms for the first time in its 55-year history.
On Monday, the national dealers’ association, Federauto, advised its members to follow government guidelines that allow repair, maintenance and related activities, such as parts sales. It asked members to limit face-to-face contact with customers, follow hygiene guidelines and promote online sales where possible.
The French automotive services association, CNPA, said on Monday that sales activities would be prohibited, except for deliveries. Repair services and parts sales will continue, the group said, adding that it was in “constant contact” with the government to clarify any points.
Faconauto, the Spanish dealers’ group, recommended to its members that they close sales and repair activities for 15 days. The group asked dealers to set up task forces and help lines to handle urgent customer requests from critical sectors such as transport and logistics, health care, and agribusiness.
Belgium’s dealer association, Traxio, said that according to its interpretation of government rules issued on Friday, dealers could not open their showrooms on weekends, but that repair and parts sales were allowed.
No restrictions had yet been placed on businesses in the U.K. Robert Forrester, the CEO of Vertu Motors, the U.K.’s fifth-largest dealer group, said last week that dealers would open on Monday.
Automakers could suffer more from a lack of demand as foot traffic to dealerships dries up and consumers brace for economic shockwaves than from factory closings, said Marco Opipari, an analyst at Fidentiis.
Manufacturers and dealers generally have at least two months’ worth of inventory so a few weeks of closure was not a big problem in an over-supplied European auto industry and lost production could be recovered later on, Opipari told Reuters.
“The real problem is on the demand side, people are not buying cars now, and sales volumes are expected to be very bad in March, with a real impact on automakers’ earnings,” Opipari said.
Luca Ciferri, Nick Gibbs and Andrea Malan contributed to this report
