Automakers urge dealers to enforce strict coronavirus precautions
Redford Township — Strict health measures such as mandatory mask-wearing and daily temperature checks have been the norm in auto plants since mid-May, when the U.S. auto industry resumed production of cars, trucks and SUVs after a pandemic-induced shutdown.
But in showrooms and on the lots where customers actually purchase vehicles, the rules are less uniform as auto dealers navigate a patchwork of local and state orders, and varying degrees of COVID-19 outbreaks.
Many automakers are offering dealerships guidance, and some are urging dealers to exceed local orders and follow the stringent protocols used in manufacturing facilities. For automakers and dealers alike, the goal is the same: to keep employees and customers safe, so plants and showrooms can remain open amid a fragile recovery of the U.S. vehicle market.
"No dealer wants to get called out as having an outbreak in their store," said Mark LaNeve, vice president of U.S. marketing, sales and service for Ford Motor Co. "Nobody wants to have that happen, both for moral and business reasons. It’s not a tough sell with the dealers."
Changing business practices
Dave Haack of Livonia stopped by George Matick Chevrolet in Redford recently to pick up his family’s new 2020 Chevy Trax. He opted to purchase the vehicle in the traditional way — stop by the dealership to check out his options, take the Trax for a test drive and then drive it off the lot.
As required by an executive order from Gov. Gretchen Whitmer, he wore a mask into the showroom. He reported a seamless experience, and he felt safe at every turn: "It seemed like everybody had masks, and they had (disinfecting) sprays. And (the dealership employees) stay away from you."
Face coverings, constant sanitization and social distancing are now ingrained into the way Matick does business, said vice president and partner Paul Zimmermann.
"Between the adherence to intuitive processes and practices by our employees, and the cleaning that we do, everyone is conscious and aware of it but not scared," he said.
The pandemic and state orders aimed at stopping the spread of the virus have drastically altered the way Matick and other dealerships do business. Matick developed its protocols based on the state mandates, plus guidance from the National Automobile Dealers Association (NADA), General Motors Co. and Toyota Motor Corp. (Matick also operates a Toyota dealership.)
Here’s what the new normal looks like: prominently placed signage reminding customers to wear a mask and practice social distancing, Plexiglas barriers at desks and constant cleaning of facilities and surfaces.
Vehicles also are disinfected before and after they arrive for service work, and after test drives. The showroom and offices have been reconfigured to promote social distancing.
Similar practices are in place at Matthews-Hargreaves Chevrolet in Royal Oak.
"We go by what the governor says and what the laws are and what General Motors" recommends, said general manager Walt Tutak. GM provided safety guidelines and has helped its dealers procure supplies, such as masks and hand-washing stations.
The pandemic also has changed how sales are completed, with more of the experience being handled virtually. Zimmermann estimates at Matick that 90% of the sales process is handled virtually for most customers, compared with 30% to 40% before the pandemic.
The dealership is now comfortable with operating this way, but evolving state orders have at times proved challenging to navigate, he said.
And as mask mandates have become a political issue, the dealership has sought to keep employees from having to enforce Michigan’s order (which requires masks be worn in indoor public spaces). Most customers comply, but employees will simply provide those who are resistant an explanation of the executive order and the option to either move outdoors or conduct the sale virtually.
"We are trying to earn a living by selling and servicing cars," Zimmermann said. "We shouldn’t have to be police, judge and jury."
Outreach from automakers
In the United States, the stores where customers buy vehicles are independent businesses that are affiliated with, but not owned by, the manufacturers. That means automakers cannot control how dealerships respond to the pandemic. But many have been in close communication about best practices — and some are now ratcheting up their outreach to dealerships to encourage them to put in place stricter protocols.
LaNeve of Ford recently visited 17 dealerships in eight states to check on their protocols. "From the beginning, going back to March, we’ve been in constant communication with our dealers," he said. "We were really encouraging them to use masks with their employees and practice social distancing."
Now, as COVID-19 cases soar across parts of the country, particularly in the South and West, Ford has "doubled down" on reaching out to dealers, said LaNeve.
"Part of (Ford dealers’) sales-and-service agreement is they have to follow the state and local government laws," he said. In states where masks are not mandated, "We're re-emphasizing Ford’s protocols. We’re asking them to do the same things, and showing them the data on why this is a really good idea."
Ford has collected data from customer surveys indicating that customers strongly favor safety measures such as contact-less service and mask requirements.
"The states that closed down their showrooms (at the start of the pandemic) really got hurt," LaNeve said. Dealers "don't want that to happen again. So it’s in their best interest to really do what they can."
Subaru of America Inc. has issued "readiness checklists" of best practices to its 635 retailers across the United States.
"We believe our customers’ expectations are typically stricter than local government guidelines for COVID-19 health and safety," said Jim Pernas, director of fixed operations for Subaru of America, in a statement.
The sales-and-service model does pose a challenge in getting retailers on the same page as the automaker, Pernas acknowledged: "Yes, there are challenges and our customers often contact us if they have issues with a specific retailer following COVID-19 guidance. Our Customer Advocacy Department works closely with our field team, and directly with retailers, to ensure customer concerns are shared and addressed at the store level."
Subaru does not have any financial incentives in place to encourage dealer compliance, but notes that one of its awards program for dealers factors in customer experience — and "we know our customers are factoring COVID-19 safety concerns into the purchase and service experience surveys," said Pernas.
Volkswagen Group of America Inc. says it’s working with NADA (which has a coronavirus hub online) to provide guidance to its dealers. "We have also worked to provide critical dealer and consumer recovery measures during the pandemic including financial support, digital touch-free tools, expanded pickup and delivery options and the sharing of best practices among our dealer network," spokesman Mike Tolbert said in a statement.
Honda and Nissan North America say they, too, have shared guidelines with their retailers.
"Every Honda associate, contractor and visitor who enters a Honda facility receives a temperature check is required to wear a mask and is required to practice social distancing," Honda spokesman Chris Abbruzzese said in a statement. "We have suggested to Honda and Acura dealerships that they follow these same guidelines, as well as comply with all local laws and requirements."
Hyundai Motor America has gone so far as to incentivize dealer compliance with its COVID-19 protocols. The automaker has also put an emphasis on getting its dealers to take advantage of digital sales and service tools that help reduce contact with customers.
"There’s value in dealers having their own ideas about how things can be done," said Barry Ratzlaff, Hyundai Motor America chief customer officer and vice president of retail experience and after-sales. "One of the most challenging things about the situation is that every community is experiencing it differently, and it really is necessary for each dealership to understand their market and their local health guidelines and be in tune with what's happening in their market. Our role is to help enable that."
Hyundai has added a new COVID-19 category to an incentive program that rewards retailers for being in alignment with the automaker in certain areas. Dealers are rewarded for publishing their own best practices for handling the coronavirus.
"That’s one thing we can reinforce," said Ratzlaff, "that every dealer should at least study the issue and have a position."