Car dealers reopening - what the easing of lockdown restrictions means for new car sales, including click-and-collect

The Prime Minister has confirmed that car showrooms in some parts of the UK will soon be able to reopen under the latest stage of the Government’s coronavirus recovery plan.

In his daily briefing on May 25, Boris Johnson said that car showrooms would be among the first retailers allowed to reopen from June 1.

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Car dealerships were among the retailers classed as non-essential and ordered to close in March to help slow the spread of coronavirus. Dealers have been waiting since Mr Johnson started to relax England’s lockdown restrictions for confirmation of when they could reopen.

When can car dealers reopen?

In his speech, Mr Johnson confirmed that car showrooms will be allowed to reopen from June 1, but only in England.

He had previously said that the reopening of non-essential retailers would happen in phases from June 1, as long as infection rates were falling and the businesses could meet coronavirus safety criteria.

He said: “It is our intention to allow outdoor markets to open from June 1, subject to all premises being made Covid secure, as well as car showrooms, which often have significant outdoor space and where it is generally easier to apply social distancing.

“We know that the transmission of the virus is lower outdoors and it is easier to follow Covid secure guideline in open spaces.”

Other non-essential retailers in England will be able to reopen from June 15.

The Government has said it will issue further guidance on the steps dealers and other shops will have to take to meet the necessary hygiene and social distancing standards.

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The announcement only applies to car dealerships in England. Stricter restrictions remain in place in Scotland, Wales and Northern Ireland, including the continued closure of all non-essential retailers. The UK Government previously said it would work with the Scottish and Welsh governments and authorities in Northern Ireland to apply the same timetable across the UK. However, it warned that different measures, such as restrictions on retailers, may be lifted at different times depending on the transmissions rates around the UK.

Click and collect

While showrooms must remain closed, the guidance issued on May 13 does open the door to dealers in England to operate a remote ordering and delivery service.

The government rules allow for “click and collect” services in England to operate, a caveat dealers are expected to use to offer contactless sales via the phone or internet.

Dealers have been able to take orders for cars during lockdown but the new rules mean they will be able to complete these orders as long as they observe social distancing and safety guidance.

For a car sale, such a method is likely to include the vehicle being fully sanitised and left in an outdoor area at a pre-arranged time for collection, with the keys left in a sanitised package so there is no contact between staff and customers.

Pent-up demand

The UK saw a 97 per cent decrease in new car registrations last month as dealerships were forced to close. Just over 4,000 new cars were registered - the fewest since 1946. However, industry observers expect a spike in sales when businesses reopen.

Industry observers predict a spike in cars sales when restrictions are eased ([email protected] Shutterstock)

Rachael Prasher, managing director of What Car?, said: “We know from our weekly online audience surveys that nearly one in five car buyers are preparing to purchase a new car when showrooms reopen. That pent-up demand is great news for under-pressure retailers and manufacturers."

Mike Hawes, chief executive of the SMMT, which represents manufacturers and traders in the UK said the announcement was "welcome news”, following claims by the SMMT that shutting dealerships was costing the country £61 million a day in lost tax income and furlough funding. He tweeted; “Welcome news: PM confirms car showrooms to open from 1 June. As our campaign said, will help manufacturing, retail and the Exchequer and can be done whilst ensuring safety of customers, staff and other visitors. Need to get the economy moving again.”

Garages remain open

While forecourts and showrooms have been closed since March, car dealers have been able to operate their workshops to provide maintenance and repair services.

Many have also been operating online and phone services for customers trying to order a new car during lockdown. Some retailers have even been offered contactless delivery of new vehicles.

While showrooms must remain closed, car manufacturing is slowly returning to pre-coronavirus levels. Most marques have restarted production at their European factories, with Aston Martin, Jaguar Land Rover, Bentley, Rolls-Royce and Nissan having reopened or confirmed plans to reopen their UK factories.

This article first appeared on The Scotsman