Autovista Group survey explores industry thoughts in a post-lockdown market

30 July 2020

A pan-European survey carried out by Autovista Group revealed how dealers, manufacturers and leasing firms were impacted by the coronavirus (COVID-19) pandemic. In the latest update, we checked in with respondents to find out how they are adapting and surviving in the ′new normal’.

Carried out in late June and early July, Autovista Group customers from across Europe completed the survey, including from countries not covered in the original April research: Finland, Poland and Sweden. Respondents ranged from dealerships to manufacturers and from workshops to financial services firms.

Optimism rising

Of the 41% of respondents that took part in both the April and June surveys, 40% said they felt more positive than they did before; while only 10% felt more negative. Those who were looking on the brighter side cited growing sales, especially of used cars, alongside pent-up demand as causes for their optimism. Many were just glad to see life, and therefore car usage, returning to normal.

However, 16% of respondents expressed that, when it comes to the impact of the pandemic, the worst is yet to come. Consumer uncertainty/caution remained the biggest cause for concern, albeit mentioned by only 21% of respondents compared to 36% in the April 2020 survey. The negative impact of high unemployment/furloughing was mentioned by 14% (down from 22% April).

Interestingly, there are signs that pre-pandemic concerns are returning, with 7% of respondents mentioning changing consumer behaviour (unrelated to the pandemic) as a concern, especially the move to electric vehicles (EVs).

Lacking support

A handful of respondents said their negativity about the future stemmed from poor government policy generally, or lack of governmental support throughout the pandemic. This was also reflected when respondents were asked whether they felt that government measures went far enough in supporting the auto industry through the pandemic. Here, we saw little change from the first survey, with 42% of respondents saying ′no’, the measures did not go far enough (compared to 46% in April). As in April, one third of respondents said they were not sure.

Dealers were especially unlikely to express that they felt governmental support went far enough, with 58% of them saying ′no’ in response to this question. In the previous survey, dealers saw government support measures more favourably than other company types.

Once again, UK respondents were much more supportive on average of their government’s measures, with 37% agreeing that the measures did go far enough and only 15% saying ′no’ (down from 27% in the last survey). This is despite the UK not including any incentive scheme for buying vehicles as part of its COVID-19 recovery, whereas other major markets have, or are planning to, implement schemes.

In Austria and Germany, the ′no’ figures were above 50%. Germany has launched a heavily EV-based incentive scheme, doubling the governmental grants for electrified models and cutting VAT as well. With these measures coming into force at the start of July, it is not yet known how successful these measures will be.

In contrast, numbers from France saw only 25% expressing that their government’s measures did not go far enough. The French incentive scheme covers all types of vehicles, new and used, electric and internal combustion engine (ICE), with the potential of grants up to €12,000 for an EV when government help and trade-in bonuses are applied. The country will be replacing its scrappage scheme, however, following the popularity of the incentives and the vehicle cap being reached. Sales rose 1.2% in June as a result of the help – the first of the major European markets to post a monthly rise this year.

Price wars

The latest survey asked dealers whether they had offered discounts to encourage sales since the pandemic began. Over half of dealers said that they had (56%).

It appears that the further a country is out of lockdown, the more likely its dealers are to be offering discounts. Only 8% of UK dealers were doing so at the time of the survey, compared with 40% and above in Austria, Finland, Germany and Sweden.

Again, it is franchised dealers that are much more likely to be taking action here, with 56% of them already offering discounts compared to just 14% of independents. In Germany, the variance is as big as 90% for franchised dealers and 15% for independents.

Leasing impact

Leasing and rental firms were less likely than respondents in other sectors to have shut their premises in response to the pandemic, with 40% not having done so. (The majority of these were rental firms rather than leasing firms). Of the 60% that did shut down, 40% had since reopened, at the time of the survey. Firms were closed for an average of 7.9 weeks.

In their follow-up comments, several respondents mentioned that they continue to work from home despite their premises being re-opened. Like dealers, leasing firms have experienced a significant decrease in sales since re-opening, with 38% of respondents experiencing a 50-75% decrease in sales, and no respondent reporting no decrease.

Cautious optimism for the future of the automotive industry is growing. However, negativity very much abounds, and the optimism we see expressed here feels much more like relief at the lifting of lockdowns than the expectation of future good fortune. Consumer caution remains a significant worry, and many respondents feel that worse is yet to come when it comes to the impact of the COVID-19 pandemic.

The results of part three of the survey can be seen in this whitepaper. Part one of the results can be seen here and part two can be found here.