To provide their customers peace of mind and security during the health crisis, Canadian dealerships have provided free services such as vehicle pickup, delivery and sanitization. But should stores bear those costs indefinitely?
Health and safety protocols in the service bay and showroom cost time and money, and Canadian auto executives are divided over whether those offerings might be monetized in the future as the COVID-19 pandemic subsides.
Ford Canada CEO Dean Stoneley said the automaker is “acutely aware” of the increased cost of doing business during the pandemic. Ford, he said, will “look at the business model” of deliveries and other programs in the future.
“Right now, we’re offering [delivery and pickup] as a free service to the consumer,” Stoneley said in a May 27 video interview with the Oakville Chamber of Commerce in Ontario. “But going forward, that doesn’t necessarily need to be a free service. These are the kinds of things we need to talk through.
“Time is money, and people will pay for convenience. So, this could be something that we add, being able to go online and quickly book a service appointment and have someone pick it up and deliver it. There could be a surcharge or premium to that.”
Many Ford of Canada dealers who participated in its “Built to Lend a Hand” program during the pandemic continue to offer pickup and delivery for service and new-vehicle sales even as Canada reopens, according to a company spokeswoman. The Lincoln luxury brand, meanwhile, has offered complimentary pickup and delivery services since March 2018.
Stoneley’s comments come as dealers and automakers adjust to business during the COVID-19 pandemic, with social distancing, frequent sanitization, digital retailing and vehicle pickups and deliveries becoming commonplace. Many practices are expected to remain popular even after a potential vaccine is approved and fears about the pandemic subside.
That can come at a cost, however. John Hairabedian, president of the Quebec-based HGregoire dealership group, said despite the costs linked to new services and health and safety protocols, the group is on track to hit its pre-pandemic budget because of advertising-spending cuts and renegotiating vendor contracts.
Still, Hairabedian said he opposes charging customers for such services.
“It’s not something that should be monetized. Businesses are doing it to protect customers for public safety. I don’t see it as a revenue generator. It’s more of the cost of doing business.”
But, some industry players have decided to start charging for pandemic-related services. Manheim, one of the biggest used-vehicle auction houses in Canada, announced in late June that it would begin charging $14.99 plus tax to disinfect every vehicle it sells. The Manheim Vehicle Disinfection Service is designed to eliminate COVID-19 and other viruses, the company said.