Pandemic drives a hard bargain with car dealers
Buying a new car isn't what most drivers are thinking about these days, but three local dealers have found a way to get their attention with something that's already on their minds.
Girard Ford of Norwich, Girard Nissan of Groton and Girard Toyota of New London are offering a service that's a product of this coronavirus moment: For free and without obligation, they will steam-clean any vehicle that's brought in.
"It's for nothing more than community. That's the only reason we're doing it," said Bob Prentiss, the service and parts director for Antonino Auto Group, which includes the three Girard dealers. The response, he said, has been "overwhelming."
Innovations like that are what's keeping local car businesses afloat during a time when sales have been cut in half. Dealers have persevered largely by changing the traditional car-buying experience into one where customers spend little or no time inside the dealership.
"All in all, it's been fairly smooth," said Todd Blonder, owner of TJ Motors, a used-car dealership in New London.
Blonder has followed the same model as most everyone else, which involves either curbside sales, which are completed outside the dealerships, or, in fewer cases, home delivery.
The internet has made it possible to do 90 percent or more of a transaction online, with the need for just a few original signatures, which are easily done outside, he said. The only glitch is that "it's a little troublesome with the weather."
Internet commerce was picking up even before the pandemic, Blonder said, with sales to repeat customers and referrals down to half of all business, the other half coming from online or drive-by customers. So the stage was set for an emergency shift to going fully online.
Some places, like the Valenti Family of Dealerships, which has a presence in Mystic, Westerly and Old Saybrook, have established a "clean room" to be used if part of a sale needs to be done inside, said Rob Valenti, the president. An office is sanitized, equipped with a screen and used for nothing else, he said.
The sales experience, traditionally a personalized, face-to-face encounter, is less so now, and Valenti said he sometimes has to stop himself from going to shake a customer's hand. Customers sometimes catch themselves doing the same thing, he said.
Valenti said his dealers are still allowing test drives, but the salesman no longer rides along because the 6-foot rule of social distancing can't be maintained. Instead, customers leave their driver's license information and go it alone.
"Hopefully, they come back," he said with a laugh.
Other dealers, like TJ Motors, have dispensed with test drives for now. Blonder said that though people still like the experience, they understand why it's on hold.
While curbside delivery is now widespread in the industry, the Girard dealers took things a step further with the steam cleanings. Prentiss said he saw a video from a dealer in Glendale, Ariz., that was offering the service and decided to give it a try.
The machine, a tile and grout cleaner, is like a pressure washer that steams the entire interior of a vehicle at up to 300 degrees. It isn't widely available, so he had to rent one from a Home Depot in Coventry, R.I.
Prentiss said the process is not endorsed by the Centers for Disease Control and Prevention as a way to kill the COVID-19 virus, but they say it helps.
All cars that come in for service at the three dealers are steam-cleaned, and the offer has been extended to the community at large, Prentiss said, resulting in 10 to 12 cleanings a day by appointment. It's been done on police cruisers in Groton City, Groton Town, Montville and Norwich. Doctors and nurses at Lawrence + Memorial Hospital have also received offers.
"I would like to think that people will remember us and we were there when the community needed us," Prentiss said.
Extra vigilance about cleanliness has added a few steps to the process of selling used cars at TJ Motors. An inquiry about a vehicle prompts an immediate wipedown, which is repeated at curbside, Blonder said. For home deliveries, the staff is given a kit of wipes, sprays and disinfectants to take along for a final cleaning.
"That's certainly different than what we did in the past," he said.
Customers buying cars during a time of tightened purse strings are the kind who have the time and inclination while stuck at home to research 0% financing, deferred payments and similar incentives manufacturers have offered to get through the crisis, Valenti said.
Others may have pandemic-related motivations. Blonder said one of his customers told him he was no longer comfortable with public transit and wanted a car of his own.
While by most accounts, business has been off about 50%, there are signs the worst has passed.
The Connecticut Automotive Retailers Association keeps track of new-car registrations submitted by dealers to the state Department of Motor Vehicles. While the number of registrations per week was in free fall during March, the decline bottomed out in the last week of the month. Since mid-April, new registrations are increasing.
The reason for that isn't clear, but Jeffrey Aiosa, an executive board member of the association, said he started noticing an uptick at his own business, Mercedes-Benz of New London, right around that time. It has accelerated since the announcement by Gov. Ned Lamont that Connecticut would begin reopening on May 20.
"We're busier today than any preceding day" since the start of the crisis, he said.
Aiosa thinks cabin fever and weariness from self-quarantine are also factors. The initial fear and shock brought on by the pandemic may be waning, he said, as people grow comfortable with venturing out while wearing masks.
"People are embracing the CDC guidelines," he said.
Most dealers took advantage of the Paycheck Protection Program, which provides loans from the U.S. Small Business Administration intended to fund payrolls, including sales commissions, and keep people employed.
But probably at least a third of the state's auto-industry workforce has been affected by the downturn, Aiosa said. Sales staffs took the brunt because they were not deemed essential workers, forcing them to operate at a distance from the public.
PPP loans have forestalled an immediate crisis for dealers, said Peter Saldamarco, former president of the Connecticut Independent Automobile Dealers Association, a used-car trade group.
"But that's going to be short-lived, and that's what concerns all of us," he said.
Still, Saldamarco has felt an all-in-this-together sensibility in an industry where fierce competition is the rule in normal times.
"I'm finding that as bad as this is, it's bringing the best out in people," he said. "When the chips are down, it feels like they all help a struggling brother."
A relative bright spot for dealers is that their parts and service operations are open and doing a brisk business, Aiosa said. Parts and service workers were ruled essential, which Aiosa called a good decision, noting that he's seen ambulances in his workshop.
But questions have been raised within the industry about why service is allowed more contact with the public while the typically less busy sales departments have to operate under greater restrictions.
There's a sense of cautious optimism that once the pandemic has passed, the auto business will right itself.
"I think that the strong will survive," said Blonder, adding that those who have been in business long enough to develop a customer base will have that to draw on. Newer dealers may be at a disadvantage, he said, along with those who don't keep up with software to improve customer service.
As for longer-term changes in the industry, the trend toward online sales may speed up, especially among younger people who have more comfort with the process. But Valenti said the personal element is likely to endure in some form, as with test drives.
Aiosa said the move toward an increasingly online model doesn't mean dealers are going anywhere.
"You need a place to come to have your vehicle serviced," he said. "We still think that bricks are not going to be replaced by clicks."