Dealerships in Nova Scotia and New Brunswick have found creative ways to cope with pandemic-related restrictions that are preventing as many as half of their customers from crossing provincial borders for sales and service.
Amherst, N.S., population 9,400, is about eight kilometres from the New Brunswick border. It’s neatly triangulated between Halifax, N.S., to the south, Moncton, N.B., to the northwest and Prince Edward Island to the northeast.
Before border closures, Amherst dealers had a service area of up to 100,000 customers in the three provinces, dealers said, and as a result, the town has multiple dealerships.
But they were hit hard on Nov. 26, when interprovincial borders in the Maritimes were closed to nonessential travel. The tighter restrictions meant that buying or servicing a vehicle was effectively banned.
New Brunswick regulations stipulate that if a visitor is not a regular commuter and traveling for work, they must self-isolate for 14 days.
The Nova Scotia Automobile Dealers’ Association has advised members that only dealer trades or deliveries by transport are allowed between the provinces, but some dealers say the rules are ambiguous and not enforced.
Ryan MacDonald, dealer principal at Cumberland Honda in Amherst, said dealership staff has been delivering new vehicles to New Brunswick customers at their homes throughout the pandemic. So far, they have not been challenged at the border, he said, adding that the RCMP stopped patrolling the border in January.
MacDonald and other dealers said they are relying on a variety of tactics to hang on to customers: digital contact (typically through the dealership website), posted video “walkarounds” that give customers a better feel for the vehicle they are considering, enhanced concierge-style customer service and, in some cases, extended warranty service intervals, which essentially allow owners to delay service without losing warranty coverage.
Cumberland Honda has been “particularly vulnerable” to the border closures because half of MacDonald’s sales and service revenue pre-pandemic came from New Brunswick, he said.
“I bought the store [from my father] in March 2020, two weeks before the border closed. It probably wasn’t the best time.”
By May, MacDonald had cut his staff of 20 by more than half, although he’s up to 18 now. After a strong second half of 2020, the dealership ended the year with 392 new and 293 used-vehicle sales. He said it was a respectable result although down from 2019, when the dealership sold about 450 new and 250 used vehicles.
Amherst Toyota, another hard-hit dealership, typically sells 400 new and 200 used vehicles a year. It lost about 30 per cent of sales and 50 per cent of its service customers, said dealer principal Glenn Roberts. Instead, many New Brunswick Toyota owners are getting routine maintenance done in the small towns where they live and warranty service done in Moncton.
“Every one of those little towns has three or four citizens who run a garage,” said Roberts. “I’m nervous. How long is it going to take to get those customers back [when restrictions lift]?”
Roberts is also fearful that if the restrictions carry on much longer, loyal customers in Sackville, N.B., will develop new purchase habits and become accustomed to making the 40-minute drive to Moncton rather than traveling to nearby Amherst.
Like other dealers, Roberts is relying on digital tools and video walkarounds to show vehicles to potential buyers.
COMMUTE AS CUSTOMER SERVICE
At Taylor Ford in Amherst, President Jeff Taylor said 30 per cent of his business comes from New Brunswick residents who live much closer to the Amherst dealership than the one he owns in Moncton.
To assist customers, the dealership has been able to offer what amounts to an informal concierge service.
Because dealership employees are allowed to cross the provincial border to commute to work, he said in some cases employees are picking up cars from customers in the Sackville area, driving to work with the vehicles so they can be serviced and returning them at the end of the day.
Even so, customers are deferring regular maintenance, which forced the layoff of one technician in Amherst, Taylor said. The Moncton dealership has only picked up a “couple of new faces” who would normally get service done in Amherst, he said.
CUSTOMERS FROM AFAR
Premium brands are facing their own challenges. Sometimes there’s just one dealership to cover the four-province Atlantic region, which has a total population of 2.4 million.
John Gwynne-Timothy, general manager of Jaguar-Land Rover Halifax, said about one-fourth of his annual sales come from New Brunswick. Customers used to visit the dealership to look at the cars and test drive them, but now they are shopping and negotiating remotely.
“For most of our business, the customer never comes to the showroom,” Gwynne-Timothy said.
A transaction is negotiated either online or over the phone, and the paperwork is shipped out with the new vehicle, typically via transport-truck delivery.
In Fredericton, New Brunswick’s capital, Volvo Cars New Brunswick has developed a loyal customer base, including buyers in P.E.I., more than 300 kilometres away, through its “white glove” concierge service, said Managing Partner David Brown, who has co-owned the dealership for five years. Although Brown wouldn’t disclose details, he said sales volume in January and February is up about 20 per cent over the same period in 2020.
The inability to offer test drives has hurt business, Brown said.
“We have not sold a car into Prince Edward Island since the border closed” in November. However, sales in P.E.I. are a small portion of the dealership’s total business.
For customers in New Brunswick and Nova Scotia, “We do a lot of sales without test drives,” Brown said. In some cases, the dealership has sent test drive vehicles to non-Volvo dealerships in New Brunswick that are owned by David O’Leary, Brown’s business partner.
If routine service is deferred because of pandemic restrictions, the Volvo dealership notes it on file to ensure the warranty is unaffected, Brown said.
If a “check engine” light comes on, however, “We go get that car with a flatbed truck.”