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Tuesday, 26 May 2020 20:03

After COVID Crisis Drives Car Sales Off a Cliff in April, Northern Nevada Auto Dealers Look to Turn a Corner

Written by Kaleb Roedel, Northern Nevada Business Weekly


Ryan Dolan, CEO of Dolan Auto Group, says the month like it’s cursed.

“April,” laments Dolan, sighing heavily, “is the worst month we’ve had on my watch. It literally cut our business---it cut everything---in half.”


Pausing, he gives a more accurate snapshot: “Actually, I would say it cut our business by 60 to 75% across the board.”


Dolan Auto Group, a family-owned company with five car dealerships in Reno and one in neighboring Fernley, is not alone.


Nationwide, the coronavirus pandemic drove car sales off a cliff starting in March, and they continued to free-fall in April.


The auto industry ran into major roadblocks as the COVID crisis unfolded. State-issued stay-at-home orders kept possible buyers out of showrooms and closed numerous sales departments across the U.S. What’s more, widespread unemployment spikes stopped countless would-be buyers in their tracks due to the looming uncertainty.


Consequently, U.S. auto sales hit a 30-year low in April, according to auto research firm Edmunds. In all, the industry sold an estimated 633,000 new vehicles, a 53% drop compared to 2019, Edmunds says.


“We’re definitely hit by it,” said Jeff Campagni, general manager of Carson City Toyota, which saw a 15% sales drop in Q1 and a 20% dip in April. “Although we were hit by it, we were grateful it wasn’t horrible.


“Now, we’re just trying to get back on track.”


With Gov. Steve Sisolak’s phased business plan slowly allowing car dealers to reopen showrooms and reignite test drives, Northern Nevada companies that spoke with the NNBW are hoping to put their Q1 and April figures in their rearview.


Helping matters, dealers are promoting big incentives for customers, including 0% loans for as long as seven years and deferred payments for as long as 120 days. And customers are paying attention. In April, no-interest loans accounted for a whopping 26% of new car sales, according to Edmunds.


Not to mention, after being shut down for nearly two months, automakers have gradually restarted production to bolster the supply chain. In April, carmakers produced just 4,840 vehicles in North America, down from 1.4 million a year prior, according to Automotive News.


“Things are picking up,” Campagni said. “I see people coming out and taking advantage of the 0% loans and deferred payments and jumping on those new cars right now. People still want to buy vehicles; people are still buying vehicles.”


Dolan agreed. However, he’s keeping in mind the state’s safety guideline that showroom areas must not exceed 50% capacity.


“I’m not trying to rush everybody down here, but it’s a really good time to buy a car on the economic side of things,” Dolan said. “I think there’s a little bit of a bounce and some pent-up urgency to come out and buy and get back to some normalcy in life. I hope that maintains and sustains throughout the summer.”


Though dealers are seeing less activity on their lots, many are seeing an uptick in online sales and digital financing, as well as touch-less curbside pickups and deliveries, according to Campagni. And he sees the sharp turn to online sales as an opportunity not only for car dealers, but also the customers.

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