Automakers are working to provide support to independent and manufacturer-owned dealerships as showrooms close all over Europe because of coronavirus restrictions -- but some dealers worry that the measures may not be enough.
Government decrees limiting personal movement and commerce considered nonessential have meant that sales activities are prohibited at dealerships, but they do allow for limited aftersales and servicing.
But the main problem for dealers is how to handle the loss of revenue. Online sales could be one option, but any orders would most likely have to be deferred until coronavirus restrictions are lifted.
Volkswagen Group's dealership organization has given Europe's biggest automaker an action plan to protect the businesses of dealers and service partners.
The plan, drawn up by the European dealer council (EDC), asks VW Group to extend the payment deadlines for new cars, used cars and spare parts; suspend all standards and audits; and revise the annual targets and bonus agreements.
At this time, measures aimed at safeguarding liquidity are the No. 1 priority, EDC Managing Director Martin Kuhn said in a statement.
The dealer council is involved in a "very constructive exchange of information with all VW Group brands, Kuhn said.
Germany's dealer association said automakers and importers are moving quickly to keep dealers liquid, but the measures may not be sufficient.
"Basically, the manufacturers and importers have recognized the seriousness of the situation and are taking action," Antje Woltermann, managing director of the German Association of the Motor Trade (ZDK), told Automobilwoche, a sister publication of Automotive News Europe. "However, that might not be enough."
In its package of measures, for example, Toyota Germany has focused on securing liquidity for dealers. The Toyota credit bank has extended payment terms, simplified the granting of loans and supports companies in their business with commercial customers.
Hyundai Germany extended payment deadlines. In addition, individual premiums for sales to private or commercial customers are no longer paid monthly but weekly and regulations for keeping stock and demonstration vehicles will be relaxed.
Another open question is how to handle dealer sales targets. Hyundai Germany told Automobilwoche that metrics for achieving the targets in the first quarter and March were still being analyzed, and targets for the coming months would be redefined.
"Almost all manufacturers' associations are working on topics such as advance payments and payment targets as well as the suspension of audits," Woltermann said. "As far as dealer targets are concerned, manufacturers and importers must move even more strongly."