California Auto Dealers Struggle Amid COVID-19 Pandemic

Across the U.S. and around the world, many businesses are struggling to remain financially viable in the wake of the coronavirus (COVID-19) pandemic. Car dealerships are finding it hard to stay afloat, especially as many people are now working from home or traveling very little. As individuals and families try to save money during this economically uncertain time, fewer people are purchasing new vehicles. For new car dealerships in California, times are increasingly tough—less than half of dealerships believe they will remain financially sustainable for longer than three months.

Alarming Survey Results

According to a survey conducted by the California New Car Dealers Association, 40 percent of respondents reported a 80 to 100 percent drop in sales since the virus began to spread in California. Additionally, over ten dealerships have already let go of dozens of employees. Dealerships indicated that they were dramatically increasing their efforts to enhance their online sales and delivery services to accommodate consumer needs. The survey was completed on March 30, so the data may be even bleaker now. 

Dramatic Decline in Auto Sales

Across the nation, all auto manufacturers reported substantial declients in their first-quarter sales. For example, Toyota reported that their March sales fell by 37 percent. While some dealerships have been successful in obtaining small business loans offered through the passing of the (Coronavirus Aid, Relief, and Economic Securities (CARES) Act, many automakers and new car dealerships face an uncertain future. 

Looking Ahead

As states begin to think about reopening their economies, auto dealerships are making the case that they need to be operational as soon as possible to provide what they see as a much-needed service. Many dealerships anticipate that once Governor Gavin Newsom’s “Stay Home, Stay Safe” order is lifted, people will want to purchase a new vehicle, especially with the price of oil so low. For now, most businesses are simply waiting to see how the next few months will unfold before making any sudden moves.

To learn more about your rights under California Lemon Law, call Lemon Law Partners, LLP today at (510) 944-0336 to schedule a free case evaluation with an experienced and trusted Berkeley lemon law attorney.

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