On March 23rd, a coalition of automotive dealers, including the American Truck Dealers (ATD), sent a letter to President Trump, Vice President Mike Pence, Cabinet members, and the Governors of all fifty states asking for “essential status” for dealerships in the wake of the COVID-19 crisis.
The Letter to the Government
The letter outlines the coalition between five automotive dealer associations:
- American Truck Dealers.
- National Automobile Dealers Association (NADA).
- Alliance for Automotive Innovation (AAI).
- National Association of Minority Automobile Dealers (NAMAD).
- American International Automobile Dealers Association (AIADA).
The federal government has listed all of the following business operations as essential during the coronavirus pandemic:
- Motor vehicle manufacturing.
- Automotive supply manufacturing.
- Maintenance and repair.
The coalition argues that the supply chain is missing a link: how are people going to be able to purchase the manufactured motor vehicles if all of the dealerships are closed? The coalition states that approximately 12,500,000 vehicles were taken off the road in 2019 and needed replacing, some of which were done with used vehicles and others with new replacements. The letter then goes on to explain all of the uses that cars, trucks, and other automobiles have in the current emergency situation, including commercial vehicles hauling over seventy percent of the nation’s freight by weight.
“In short,” the letter reads, “there are thousands of scenarios that would prompt the urgent need for a car, SUV or truck –now more than ever. Our members would simply like to provide vehicles to those customers in a secure manner, while at the same time meeting our obligation to the public-at-large and our employees.”
The letter can be read in its entirety here.
Too Little, Too Late?
The enabling of lighter vehicle dealerships to operate during this pandemic may help with keeping the economy rolling, but for the commercial trucking industry, it may already be too late.
Recently, truck building companies have been halting production at their factories. These include popular brands such as:
- Navistar International
The factories are being shut down for at least two weeks and may be extended if the situation calls for it. If a dealership opens to sell new heavy-duty trucks, they will have all of the stock they currently have, but will eventually run out of new trucks to sell. After that, having the dealerships open will have no effect. It would have been wiser to have these dealerships be deemed essential from the beginning, before the factories decided to close down. It is very possible the closing of dealerships gave the factories further incentive to shut their doors for the time being. After all, there is no reason to spend the time building a big rig when you cannot sell it and have to store it somewhere to keep it in pristine condition.
In the current socio-political climate, maintenance is king. There are a plethora of used trucks on the market due to trucking companies exiting the business and putting their vehicles on the market. This, combined with the shutdown of dealerships and factories, makes purchasing used vehicles and repairing them the current trend.
Article courtesy of TopMark Funding.