CNPA, the French automotive trades association that also represents dealers, noted that the government has declared the coronavirus crisis to be a situation of “force majeure,” meaning that contractual obligations may be waived in many cases.
French dealers are sitting on about four months’ worth of stock, both registered and unregistered, representing a cash tie-up of 7 billion euros to 10 billion euros ($7.5 billion to $10.7 billion), CNPA President Francis Bartholome told the French automotive website Autoactu.
Bartholome said that discussions were underway with automakers.
Renault Retail Group said it is working with dealers to ensure they remain solvent.
The Renault subsidiary has a network of 275 outlets and sells about 20 percent of all Renault Group vehicles in Europe, including budget brand Dacia.
A spokeswoman said the details were still being worked out, but that Renault’s banking arm, RCI, was involved in the discussions, with both company-owned and independent dealers.
Christophe Michaeli, director of the French automobile market at BNP Paribas Personal Finance, said some automakers had set up emergency support systems.
Ivan Segal, Renault commercial director for France, told Autoactu that the automaker was going to extend invoice terms for dealers up to 120 days in some cases.
Adolfo De Stefani Cosentino, chairman of the Italian dealers’ association, Federauto, said most automakers have been “proactive in helping dealers face this difficult situation.”
Cosentino said measures taken so far included guarantees of first-quarter bonus payments, and deferral of invoices for demo and courtesy vehicles, and payments for parts.
Volvo Cars Italy, in a letter to dealers seen by Automotive News Europe, said dealers would get an additional 110 days to pay for cars already in stock, as well as those shipped between March 11 and April 3, and the company’s partner bank would grant 90-day extensions on invoices due in March and April.
Plinio Vanini, chairman of Autotorino, Italy’s largest dealer group, said that the expected economic hardship could force automakers to reassess the size of their dealer network.
“As we are seeing a worldwide recession, automakers will not be in a position to keep their entire dealer networks running,” Vanini said. “They might be forced to take hard decisions on the number of outlets they actually need.”
Renault Retail Group said last month that it would be closing some showrooms as part of a retrenchment of its operations, in part to prepare for expected growth in online sales.
Andrea Malan of Automotive News Europe and Christoph Baeuchle of Automobilwoche contributed to this report.
