Back in April, we reported that the Chinese car market was seeing strong demand from consumers emerging from the COVID-19 lockdown there. Buyers were returning to showrooms, and servicing and aftermarket services were in strong demand. The hope and prayer of every car dealer in Ireland was that similar levels of pent-up demand would be seen in the Irish market once the dealership doors could open once again.
Cautiously good news
The good news, or at least potentially good news, is that it seems to be happening. Possibly it's only short-term, and possibly it's not across all brands, but one major Dublin-based dealer group is reporting brisk trade in the past couple of weeks.
"I suppose we've been pleasantly surprised by the consistent strong demand we've been seeing from our customers. Our workshops are operating at full capacity, and our daily service bookings are in line with our pre-COVID activity." These the words of Donal Geoghegan, dealer principal of Frank Keane Volkswagen, which has outlets in Liffey Valley and Deansgrange.
"It's a very strong indicator of normal business activity resuming," Geoghegan told CompleteCar.ie. "I think part of this is that demand is actually driven by consumers remembering the issues that they saw in 2009 to 2013; of not having properly maintained their vehicles. So, they seem to be more conscious regarding proper maintenance, in accordance with manufacturer's recommendations now than they have been in the past. And one key stat that amazes me is the activity we recorded in our call centre on the first day we opened. We received the highest amount of inbound calls that we have had in any other day, even pre-lockdown, ever. So that was very, very encouraging for us.
"We figured that maybe after the first week demand may tail off and reduce quite a bit. However, we're still experiencing similar demand levels, which again is another strong indicator of normal business activity."
What about new car sales?
That was perhaps to be expected from the service and maintenance point of view. Customers, other than those in key working roles, were effectively locked out of dealerships from March onwards, and clearly are keen to have their cars running healthy, doubtless worried about the prospect of spending an afternoon on a hard shoulder, waiting for a socially-distancing tow truck to arrive. New car sales are far more fickle, and far more driven by the winds of economic outlook, but the news in that sphere is good, too.
"In terms of our total sales volumes, they're actually very much in line with the same period of 2019, albeit there's a slight change in the mix, with a bit more in favour of used sales at the moment," said Geoghegan. "However, as we're seeing our used stocks dry up, with the high levels of sales, there's a higher level of activity now in new cars and particularly as we approach the second plate change in July."
The way customers are approaching sales has also changed, says Geoghegan. "The lockdown and COVID restrictions have accelerated what I think has been happening anyway, where consumers are more open to buying online than ever before. Customers are now very definite and specific about what they want. And when they come to our dealerships, they're at the buying stage now rather than being at the consultation stage. So they've certainly done most of the research into what they want from their homes, making the actual buying process somewhat easier for them, and the selling process easier for us in turn. Generally, all they want by the time they come to our dealerships is to feel comfortable with the people that they're dealing with, and to know that they're getting value for money."
"I think there's no doubt that the second half of the year will be a little bit more challenging than it has been in previous years," continued Geoghegan. "We're already seeing used car prices strengthen and increase in some cases, and given the way things are with that kind of shortness of supply coming into the market, I would expect that this trend will continue well into 2021. That will be of benefit to new car buyers because the value of their trade-in will reduce the cost of change.
"There are still plenty of positive indicators there, and looking at this week with most of the country reopening, we're seeing strong demand now on both new and used vehicles. Again, we keep expecting that almost every day or every week our demand is going to dry up, but it's still there so it's quite positive."