Dealers across Canada are retooling their operations, and in some cases, laying off staff amid a rapidly changing landscape marked by plunging sales and states of emergencies imposed by governments trying to curb the spread of the novel coronavirus.
Depending on where retailers are located, different rules apply; in New Brunswick for example, dealerships’ service/repair and parts departments can remain open but showrooms are closed to patrons, said Ian Hatheway, president of the New Brunswick Automobile Dealers Association, which represents 105 members.
Sales are conducted online but “the paperwork will have to be done at the customer’s residence,” said Hatheway, also dealer principal at Hatheway Auto Group. “We have our people set up with latex gloves, clipboards and disposing of pens after [their use]. Contracts have to be signed in person to ensure the person buying is the person signing.”
In Alberta, the order does not apply to dealerships, said Denis Ducharme, president of the Motor Dealers Association of Alberta, which represents about 400 dealers in the province. Although he would not elaborate, Ducharme said he was aware of dealerships that have laid off employees in the province.
On Monday, Ontario and Quebec announced near-complete shutdowns of their economies.
Ontario’s two-week emergency order goes into effect 11:59 p.m. Tuesday, and applies to all non-essential businesses but food, medicine and “essential services” would remain available.
Ontario released a list of what it called “essential workplaces,” and it includes auto dealerships, service centres and repair shops.
Quebec Premier François Legault made a similar announcement, mandating that all non-essential businesses in Quebec were to close Tuesday night until April 13.
Only grocery stores, pharmacies, banks, media and a few other services will be allowed to stay open, Legault said, adding that companies that can operate with employees working remotely can also continue, he said.
A spokesman for Premier Doug Ford said "dealerships are not compelled to remain open but may do so at the proprietor’s discretion."
Shahin Alizadeh, CEO of Downtown Automotive Group in Toronto, said his stores are closed effective today and that the group would “play it by ear” to determine when to re-open. He said he saw no other choice but to close his dealerships in order to keep customers and employees healthy.
“It was a bit of a shock to the system, where you just aren’t used to seeing it go from a steady flow of reasonable business level to one where people are afraid of interacting, people are afraid of going into the showroom,” Alizadeh said.
He said the group sent out about 40,000 emails to its customers and guests informing them of the decision and that the responses from them have been generally positive. He also said the group has an “emergency crew” on hand to handle urgent services for customers.
“I’m so far standing by our decision that it was the right call,” Alizadeh said.
A state of emergency allows governments to exercise extraordinary powers that essentially suspend rights during the time of the crisis, which can include such events as war, natural disasters, major accidents or disease outbreaks.
Such orders can include the temporary closures of everything from schools, cultural events to businesses and public facilities, such as libraries. They can also limit the number of people attending private gatherings.
In Nova Scotia, gatherings of more than five people are prohibited. Any workplace or business that is not deemed essential can remain open as long as a two-metre or six-foot distance can be maintained.
“There seems to be a little bit of confusion,” said John Sutherland, executive vice-president of the Nova Scotia Automobile Dealers Association. “We’re trying to determine whether it’s five or more. Our association has advised five, and it depends on the configuration of dealerships. The showroom is one facility, service would be another area of the dealership, but in all cases there’s the matter of social distancing – six feet or two meters. And clearly, service bays would be a separate area as well.”
The Canadian Automobile Dealers Association (CADA), which represents more than 3,300 members, is asking, among other things, that governments deem dealerships, particularly their service departments, essential services.
Tim Reuss, CADA CEO urged the federal government to issue a guidance listing dealership operations as an essential business.
“We strongly encourage the federal government to take a leadership position on this issue,” Reuss said.
Hatheway, meanwhile, has had to lay off 65 per cent of the 107 employees at his auto group’s four dealerships.
“The biggest challenge I see is trying to assure our staff that things will eventually return to normal and that we will provide them with as much assistance as we can to get everyone through this, and of course the company needs to stay healthy throughout this crisis,” he said, expressing confidence in manufactures and financial institutions that they will do “everything they can to help all businesses get through this.”