covid-19: the impact, the opening and the way …...the impact of covid-19 covid-19 has resulted in...

June 18, 2020

COVID-19: the Impact, the Opening and the Way Forward

A survey of Ontario’s Motor Vehicle Salespersons prepared by the Ontario Motor Vehicle Industry Council

Table of Contents

Documents Page No.

Impact of COVID-19 3

Impact on Employment 3

Impact on Salespersons Operations 3

Response to Government and Regulator Support 4

Economic Outlook 4

Survey Questions and Results 5

Sample of Salespersons’ Comments 24

OMVIC Contact Information 26

The Impact of COVID-19 COVID-19 has resulted in significant negative impacts on Ontario’s automotive sales industry, both the used and new vehicle markets.

A sharp drop in demand and increased unemployment, in combination with public health measures that closed physical dealerships and restricted test-drives, led to a sharp drop in sales.

OMVIC’s survey “Measuring the Impact of COVID-19 and Moving Forward” was sent to motor vehicle salespersons to procure more information related to sales, employment, personal protective equipment (PPE), and economic outlook. The survey ran from June 4th to June 11th; 4024 salespersons completed the survey providing insights and data on how COVID-19 impacted them from April 1st to May 31st, 2020.

SALESPERSONS

Over 4,000 salespeople completed the survey with 45 per cent from The Greater Toronto Area and 28 per cent from southwest Ontario. Respondents from northern, eastern and the Ottawa region made up the remaining 27 per cent. 66 per cent of salespeople polled sold both new and used cars, and more than 50 per cent have worked in motor vehicle sales for over ten years.

Impact of COVID-19 on Employment

• For salespeople working in southwest Ontario and the Greater Toronto Area, 33 per cent reportedthat fewer than 25 per cent of employees had been laid off at the dealership where they worked.This statistic is similar in number to salespeople working in the Ottawa region, and eastern andnorthern Ontario, where 31 per cent reported that less than 25 per cent of employees had beenlaid off.

• Interestingly, in southwestern Ontario and the GTA, there was a near equal split in thosesalespeople worried about being laid off in the next six months, with 51 per cent expressingconcern versus 49 per cent who were not worried. In the Ottawa region, eastern, and northernOntario, 45 per cent of salespeople were worried about being laid off in the next six months, while54 per cent were not.

Impact of COVID-19 & Salespersons Operations

• Salespeople also reported on how their dealerships were accommodating public healthmeasures. 93 per cent reported that new protocols for cleaning vehicles and facilities had beenimplemented.

• 85 per cent said that their dealership had provided employees with Personal ProtectiveEquipment.

COVID-19: the Impact, the Opening, and the Way Forward for Salespeople 3

• Three thousand one hundred fifty-five salespeople reported that they were benefitting fromgovernment support programs – with 37 per cent of dealers using the Canada EmergencyResponse Benefit (CERB), followed by 27 per cent of dealers using employer payroll subsidy.

• 85 per cent of salespeople rated the support from the Federal Government and ProvincialGovernment during the COVID-19 crisis fair to excellent.

• 89 per cent of all responded rated the response from OMVIC fair to excellent.• 93 per cent of salespeople are aware of OMVIC’s COVID-19 Guidelines for Touchless Test Drives

and Dealer Operations.

Economic Outlook

• Salespeople were not optimistic when it came to predicting the economic outlook for Ontario. When asked how confident they felt about Ontario’s economic outlook, 30 per cent selected “not confident,” and 34 per cent selected “neutral.” However, when asked about their vision for the dealership where they worked, 21 per cent said they were not confident, 35 per cent were neutral, but 28 per cent felt confident.

• For sellers of new cars, 47 per cent of respondents stated that improved consumer confidence in the economy would be the biggest driver of sales in the next six months, followed by low-interest rates and the availability of financing at 25 per cent.

• For sellers of used cars, the two biggest drivers were improved consumer confidence at 43 per cent, low-interest rates, and availability of financing at 31 per cent.

Response to Government and Regulator Support


Q1: Where is your dealership located?


Q2: What do you primarily sell?


Q3: How many years have you been employed in the motor vehicle business?


Q4: What percentage of employees have been laid off at your dealership?


Q5: How has COVID-19 impacted your employment at your dealership? Select all that apply.


Q6: Are you presently benefitting from one of the following government support programs?


Q7: How would you rate the response from the Federal Government in supporting motor vehicle dealer operations during this crisis?


Q8: How would you rate the response from the Provincial Government in supporting motor vehicle dealer operations during this crisis?


Q9: How would you rate the response from OMVIC in supporting motor vehicle dealers during this crisis?


Q10: Are you aware of OMVIC's COVID-19 Guidelines for Touchless Test Drives and Dealer Operations?


Q11: Has your dealership made any physical renovations as a result of COVID-19 (i.e. creation of protective barriers)?


Q12: Have physical distancing requirements/new protocols for cleaning vehicles or facilities been implemented at your dealership?


Q13: Has your dealership provided Personal Protective Equipment for employees?


Q14: How confident are you about Ontario's economic outlook as of right now?


Q15: How confident are you in your dealership's economic outlook as of right now?


Q16: In your opinion, what will be the biggest driver of new motor vehicle sales in the next six months?


Q17: What will be the biggest driver of used motor vehicle sales in the next six months?


Q18: What is your confidence level in the recovery of the motor vehicle industry in the next six months?


Q19: Are you worried about being laid off in the next six months?


Sample of Salespersons' Comments

“The way in which dealerships encourage their sales staff to sell will dictate how successful the dealership and salesperson will be. People want to feel comfortable, informed, but even more they want the connection with the salesperson than ever before. They want reassurance, and the highest quality service possible. If you can connect with the client, and give them reassurance and comfort, they will purchase from you. I find less people shopping around, and more people coming into the store prepared to purchase. Also, a lot of clientele want to complete more purchasing remotely. I do not believe moving back to pressuring clientele into the dealership unnecessarily will assist in assuring their comfort. The easier the transaction feels, the better closing ratio you will see. Dealerships who promote obscene incentives will only hurt the remainder of the automotive economy - or at least the salespeople who are not well trained to overcome the new and rising objections from clientele.The current objections being faced aren’t as much centred around budget concerns. People want to beaccommodated, visit the dealership once to purchase and only once more to pickup the vehicle (delivery tohome being an even more preferred method). Relationships seem to be more the forefront than ever before.”

“OMVIC should be checking in on certain dealerships to make sure they’re cooperating with COVID-19 standards. Did not feel safe to work anymore.”

”2019 was not a strong year for used sales. 2020 is abysmal. The government directive at the beginning was very unclear and vague. We are not headed in the right path. Consumer confidence is very weak.”

”I truly believe that dealerships should have kept it by appointment only while this emergency is still going on. The amount of people coming in and test driving and not buying in the near future is extremely absurd. Also my dealership is mandatory full 40 hrs a week with a showroom loaded with staff. I watch sales people daily huddled up talking with zero social distancing. I think dealers should mandate shorter shifts with 2 or 3 teams in place.”

“Dealership and manufacturer have to give more incentives to the customers and be more transparent in dealing with customers---no hidden and extra charges. Sales managers need to be honest and transparent in order to close the deal and not create pressure on the salesperson to lie with the customers. stop dishonesty, misrepresentation and stop selling to customers the 3rd party warranties other than manufacturers’ warranty. Need to create a customer's confidence and comfortability in doing business.”


Sample of Salespersons’ Comments

“I think there was way too much confusion between the government and OMVIC. The Premier said business could offer online sales with curb side pick up. OMVIC’s “interpretation” was no customers for sales on premises. Curbside pick up meant they could pick up at the dealership.Also when showrooms closed down. OMVIC “interprets” no one, not even staff in showroom. However some stores need a GM to assist service and client questions. So messaging was not clear from the Province or OMVIC’s “interpretation” is vague at best. It would have been nice to have either a very distinct and firm stance one way or another. Not interpretations or summations or guesses. It was tough for all involved but clarity was most important. Thanks for all your work during this time I am sure it was very difficult.”

“Our dealership has gone over and above to ensure the safety of our customers and staff. We are still limiting the amount of customers allowed in the building, with only one entrance plus extensive cleaning and sanitization of all cars and areas. Dealerships that are wide open with little or no protocols in place need to be reprimanded in some way. They’re putting peoples lives at risk to make money. You can’t always tell who has a compromised immune system, and some of us need to work to survive.”

“Overall provincial and federal government did great to help this industry.”

“OMVIC has done and is still doing a great job of keeping everyone informed.”


For More Information Please Contact:

Daphne Boxill Communications Officer Ontario Motor Vehicle Industry Council [email protected]

Paul M. Yeung Manager, Stakeholder & Industry Relations Ontario Motor Vehicle Industry Council [email protected]
