To say that the automotive industry is crippled by the novel coronavirus pandemic would be an understatement. Following multiple closures of major factories in Europe, it now appears that the car dealerships across the continent of Europe are being shut as well.

This is part of the EU’s efforts to forcefully restrict the movement of its citizens and close all nonessential businesses with hopes of containing the spread of Covid-19. However, maintenance and repair operations, as well as sales of parts, will be allowed to continue, Automotive News Europe reports, although staffs were told to limit face-to-face contact with customers and promote online sales where possible.

The director of the European dealers’ association CECRA, Bernard Lycke said his group had been receiving requests for clarity from dealers all over Europe in response to governments’ decrees. “Closures would have a big impact on the profitability of our members, but first they have to respect their governments’ actions and hygiene measures. It’s a big challenge for us, because we represent small, independent businesses. They are worried because they are all independent companies,” Lycke said.

The sale of new cars have drastically reduced since the virus started spreading in Europe. Italy, now dubbed the “Wuhan of Europe,” saw its largest auto dealer group Autotorino close showrooms for the first time in its 55-year history. In the first two weeks of March, registration of cars in Italy fell by a third to less than 27,000 units compared to the same period in 2019, and the rate of decline is only accelerating. In the first week, registration is down by nearly 15%, but the second week saw a massive 50% drop, sources say.


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On March 13, less than 500 new passenger cars were registered, a 90% decline from February 14, 2020. If sales activities are not continued, March registrations in Italy could be down by 85%. Similarly, in China, sales fell by 80% in February (compared to the same month in 2019) as a result of a nationwide lockdown.

Meanwhile, an analyst at Fidentiis, Marco Opipari, said that car brands could suffer more from the lack of demand as foot traffic drops and consumers brace for economic shockwaves than from factory closing. Manufacturers and dealers generally have at least two months’ worth of inventory, so a few weeks of closure won’t pose a problem in an over-supplied European auto industry. Lost production could be recovered later on, Opipari told Reuters.

“The real problem is on the demand side, people are not buying cars now, and sales volumes are expected to be very bad in March, with a real impact on automakers’ earnings,” Opipari said.

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