Planning for “Plan B”
The latest government announcement sees England moving to “Plan B” in order to tackle the rising number of Covid cases as the Omicron variant continues to spread.
The most notable aspects of these new restrictions are the return of mandatory face coverings indoors (with some exceptions relating to hospitality), the introduction of Covid passports for venues and events and reinstating the guidance to work from home.
Whilst this is not thew news many of use were hoping to hear, we are confident that these latest restriction will have very little impact on the automotive retail sector.
We’ve seen retailers perform well through tougher restrictions with retailers reporting doing more than 90% of “normal trading volumes” at the end of the most recent period of severe restrictions back in April 2021, when forecourts were closed apart from click and collect.
Consumer demand for both new and used cars also continues to remain high and audience on Auto Trader has remained strong, up 18% over the last week vs. the same week in 2019.
For these reasons, we expect that we will see a strong market in the weeks and months ahead, barring any further restrictions. In the meantime, retailers should ensure Covid safety measures are present on forecourts and visible online to enable consumers to do as much of the car buying journey as possible remotely and as safely as possible.
Commenting on the latest announcement, our Commercial Director, Ian Plummer, said:
“This is the news that we were all hoping wouldn’t come. However, the response of automotive retailers in previous times of tougher restrictions gives us confidence for the coming weeks. In fact, in April 2021 when far stricter restrictions were in place, which required forecourts to remain closed but click & collect was allowed, used car transactions were down by just 6% on the same period in 2019.
“The industry was able to successfully manage those restrictions because retailers were quick to adopt to online retailing and took steps to enable consumers to complete as much of the car buying journey as remotely as possible. This included offering Click & Collect and home delivery services, as well as personal video walk-throughs, and scheduled appointments. We would highly recommend that retailers continue to make use of these services, ensuring they are featured prominently on their adverts, in their marketing and across their digital forecourts.
“There are plenty of other reasons for retailers to remain confident, not least the strong levels of consumer demand we’re tracking in the market. We have not seen any change in this since the news last night. Coupled with the broader positive economic outlook, we don’t see that the Government’s latest measures should deter consumers from buying a car. The most successful retailers over the coming weeks will be those that make it as easy, and as safe as possible for them to do so.”
As always our teams will be on hand to help you.