Auto Dealerships Driven to Survive During an Economic Storm

There is an old adage that says what doesn’t destroy us, makes us stronger.

Deemed an essential business by Gov. Kay Ivey, car dealerships and their service departments have been steadfast in making the best of a bad situation during the COVID-19 pandemic.

Most of them have cut hours of operation; they have had to make a variety of adjustments to their daily operations; and they have been steadfast about finding ways to keep their employees working, whether with the help of the Paycheck Protection Program or by sheer will.

All of them reported a drop in car sales in the early days of the shutdown, but their resilience is paying off as most are reporting a rebound.

The Huntsville Business Journal checked in with several car dealerships to find out what it has been like riding out a pandemic in the midst of a massive economic storm, while most of their customers are sheltered at home. Their flexibility, adaptability and entrepreneurial spirits truly stand out!

Landers McLarty Automotive Group

Frank Williams, Executive Manager and Managing Partner of Landers McLarty Automotive Group, said they have an incredible business, so he feels they have an obligation to the community, their customers, and their employees to make whatever adjustments are needed to support them.

“I have focused more on how as a community leader, we can sustain the livelihood of our employees and protect their well-being,” Williams said. “It’s been an adjustment, but it makes you think about priorities which brings you closer to your employees, closer to your family, and it makes you look instead at the positives while forcing you to prioritize. If we do that, we will come out on the right side of this.”

Yes business has been off about 40 percent but he doesn’t look at it from a profit and loss perspective.

“Technology lets us create platforms that provide what the customers want, as opposed to what we want, and that is a plus,” he said. “I don’t focus on the negative. I am using the situation to look for ways to do business better for our consumers, and technology has allowed us to do that.”

If a customer doesn’t want to come into the dealership, they have a social distancing tent set up outside,” Williams said. “If they want to do it all online, they have created another platform for that. If a customer doesn’t want to leave home, they implemented a pick-up and delivery service to support that.

“Everybody is being hurt so looking at it from a profit and loss standpoint isn’t as important as what we do to adjust our cleaning so people feel comfortable coming to work; and making sure our actions as leaders help sustain people and their families.

“The national media focuses on the losses, but we have not made a single cut. We see a lot of positives with our employees stepping up. We want everybody to be happy and I think we have created what will be a new way of doing business.”

Ray Pearman Lincoln  

“We are open every day and we have not had a single layoff,” said Paige Pearman-Sandlin, general manager at Ray Pearman Lincoln. “We saw a dip in car sales to about half what we normally see, but people are still out looking; our service department has remained steady; and we have seen an uptick in the number of people setting appointments to see or test drive a vehicle, as opposed to just dropping by.”

Ray Pearman Lincoln practices safe pickup and delivery. (Photo/Paige Pearman Sandlin)

She said the changes the dealership has made operationally have not been substantially disruptive.

“Some people are wearing masks, but not everybody; and our employees are ready to put one on if the customer is wearing one or inquires about I,” she said. “We are not shaking hands and we have propped open all the doors, so no one has to turn a doorknob. We are very cautious about common touchpoints and we have a company who comes out and spray disinfects the building while our employees are constantly cleaning and sanitizing their work areas.”

She said they can set up virtual test drives but if a customer wants to physically drive the car, they can do so alone. If they request a sales rep, everyone wears masks and gloves.

They also have a designated pick-up and delivery driver who wears disposable gloves, and they wrap the steering wheel. They put the keys in a velvet bag and leave them for the owner so there is no direct contact.

“We were actually ready for the shutdown in terms of being able to process a lot of the car buying steps online since we have been doing that for a while, but I think this has helped us get better at it,” said Sandlin.

Lexus of Huntsville

“Lexus of Huntsville has not only remained open through the entire shutdown, but we have maintained our full hours in both car sales and in our service department,” said Dennis Davis, managing director of the dealership. “Our service department waiting room is open and we are in full compliance with social distancing requirements as set by CDC guidelines.”

Davis said they originally furloughed only two employees, but they called both back when businesses across the board reopened May 19.

“Compared to the weeks or months before COVID hit in mid-March, car sales were off somewhat, but the good news is because Lexus was quick to cut interest rates to 0 percent for the first time in recent history on some models, with others offering six months of no payments, it is the an excellent time to buy that new or certified pre-owned vehicle,” said Davis.

He also said if people are hesitant about taking test drives, he guarantees all cars are disinfected before and after each test drive, and they are using steering wheel covers to prevent any spread of the virus or other germs.

“Our main focus throughout this situation has been to keep customers and employees as safe as possible by following the guidelines set by the CDC.”

Bill Penney Automotive Group

“Prior to March 16, Bill Penney Toyota was having record, record month – such a great month it was unbelievable,” said Hunter Johnson, general manager at Bill Penney Toyota. “On March 16, we started hearing rumblings something is about to happen and when the NBA shut down, it hit us hard. Car sales dropped 30 to 40 percent.”

Unwilling to let dread settle in on their employees and thinking the safest thing was not to have as many people in every department, Johnson and owner Zach Penney pulled the leadership team together and produced a video for all 250 employees. They took the store to half-staff with no one laid off, staggering everyone three days on and four days off.

“The first 2 weeks of April, business went down almost 70 percent, but we manufactured jobs for our employees doing everything from cleaning and sanitizing to doing work around the store we had been putting off like painting and home improvements.

“Since reopening May 4, we brought everyone back on … we have done really well and getting close to normalcy,” he said. “Our used car department in April had the best April in 56 years, and where the ratio of new to used cars is usually 7 to 1, it is now 1 to 1.”

They have also been there to help the public and to respond to customer calls. Throughout the crisis, the dealership has been going to customer homes to pick up the cars, even if all they needed was an oil change, and delivered it back to them following CDC guidelines for social distancing, wearing gloves and covering the steering wheel. This popular valet service will become part of regular business going forward,

The dealership uses a Quickpage system consisting of a video and a taped virtual test drive. If customers still want to test drive it themselves, the staff wipes it down, adds covers to the steering wheel and delivers it to the customer for 24 hours.

“We are also doing ‘payment distancing’. Toyota is offering zero percent financing with no payment for six months and people are taking advantage of it,” said Johnson. “We have always sold cars online, but we are taking it a step forward and emailing paperwork with e-contracting, which will cut hours off the car buying process.”

Smith Infinity

Justin Smith, executive manager for Smith Infinity, said April was nonexistent in terms of new car sales but used cars and the parts and service department have kept the wheels rolling through the entire shutdown. Ironically, his father’s dealership, Jimmy Smith Buick GMC in Athens, was selling so many cars they were close to running out of inventory.

“The imports were slower pushing out special financing than the domestics and I think that has been the difference, but I admit we were down a lot more than I expected going into this,” he said. “Our parts and service department has remained steady at around 75 percent and while they have carried us through April, we have sold more cars between the first and 15th of May than we did the whole month of April, and we are beginning to start seeing some traffic again.”

He said adjusting to sales in the time of COVID has been somewhat strange. The instinct is to see someone on the lot looking and to approach them with a handshake, but his sales staff is learning to adjust to how to approach people. He said many people, especially those wearing masks do not want to come inside and they are all social distancing, so it has been a challenge.

“It is sometimes hard to do business that way, but I think once people hear from the government that they have this thing under control that will change,” he said. “I have to say though that traffic has been twice as heavy the first two weeks of May than it was the entire month of April.”

On a lighter note, Smith said he feels like he is back in college with all the daily webinars.

“I sit in on webinars sometimes it seems all day,” he laughs. “The NADA (National Automobile Dealers Association), the ADAA (Automobile Dealers Association of Alabama), Infinity keeping us up-to-date on their rollouts, and even a webinar from an accounting firm teaching us the PPP.

Century Automotive Group

Century Automotive has remained open throughout the pandemic but owners George and Tracy Jones immediately put a plan in place to protect their customers and employees.

“Our main company objectives during this time was keeping everyone safe and allowing our employees to be able to work and support their families,” said George Jones. “Several of our employees’ main responsibility is sanitizing the facilities hourly; and everyone is enforcing social distancing in their day-to-day business dealings and meetings.

He said several employees chose not to work, and they supported their request for time off, and they have also adjusted hours and implemented split crews for most of their departments.

“We adjusted our test drive options based on customer preference and take vehicles to our customers house and allowed them to drive without a sales consultant in many cases,” Jones said. “We also offered pick-up and delivery for our service customers who weren’t comfortable coming into the dealership.”

He said their sales volume was only down 10 percent in April, but for the most part, business was back to normal in May.

“We are fully staffed and back to our normal business hours, however we realize we must continue to sanitize and continue social distancing,” he said.

“I’m grateful to our customers who have supported us during this time. We are a small, locally owned family business celebrating our 50th year. I’m grateful for our employees who have maintained positive attitudes throughout this crisis, and we will continue to take great care of our company and customers.”

Jerry Damson Automotive Group

Ben Boles, director of digital media for the Jerry Damson Automotive Group, said that from the day Ivey put the stay at home order in place but deemed automotive dealerships and their service departments essential, they developed a governing philosophy surrounding how to keep their employees and customers safe.

“We adopted procedures and protocols to make sure we were compliant not just with state guidelines, but really, with Damson family guidelines,” Boles said. “The family took it seriously, took it to heart, and understood their role in society. If we are judged an essential business, then it is essential our business be leader in the community.

He said they were committed to accommodating whatever their customers needed and will do whatever it takes to make it work for them.

“Our waiting room is open and we have a spacious new building, so we spread out the furniture to make it safe and comfortable. If you prefer, we pick up your vehicle and deliver it back to you. That is fine too,” he said. “We were very quick to adopt high sanitation standards that include gloves, coverings, contactless servicing of your car, and we amended the way we did test drives. We practice social distancing and wear masks when necessary.”

He credits the Damson clean up shop as the unsung heroes of the coronavirus shutdown because they get every car, including used cars, sanitized and they have created a new definition of a frontline-ready used car.

“We have been able to stay open all the days we are usually open and that keeps our employees working, but we did scale back our hours a little because there has been less foot traffic,” Boles said. “We’ve had a lot of change but thankfully as the economy has started reopening, things are looking up.

“People are coming out and looking and they are serious too, definitely here to buy a car!”