The company will emphasize three initiatives:
1. Accelerating dealerships’ adoption of digital tools for both the retail and wholesale vehicle markets
2. Using the data collected by each Cox brand to give dealerships more insight into the market and customers
3. Working to deepen relationships with employees and customers, in light of both the pandemic and widening concerns about racism and injustice sparked by the recent death of George Floyd while in police custody in Minneapolis, Schwartz said.
Cox’s plan was developed during the last few months as executives considered “how we could help dealers move forward” after the pandemic, Schwartz said.
The outbreak of COVID-19, the respiratory illness caused by the novel coronavirus, disrupted the industry beginning in March, as state and local governments imposed restrictions on business activity to limit transmission. Dealerships in some states were required to close their showrooms and shift sales online.
As part of its immediate response during the crisis, Cox Automotive discounted dealerships’ fees for various products, moved its Manheim auction unit to all-digital sales and helped consumers identify dealerships that offer home delivery and other digital services.
Cox furloughed more than 12,500 employees in response to the pandemic. About 9,000 of them worked for Manheim, which last month said it will recall just over 300 employees. Some recalled employees work in reconditioning and titling roles, Schwartz said.
Nearly 5,700 of the furloughed Manheim employees worked part time, including drivers who move vehicles through physical auction lanes and elsewhere on the lot, Schwartz said. Employees will be brought back as work becomes available, he added, though it’s possible some of the furloughs may become permanent.
“As digital adoption continues to get stronger and stronger, we will move cars on our grounds less than we are moving them today, which portends that we won’t need as many drivers,” he said.
Cox in April projected a 25 percent revenue decline this year because of the virus. Schwartz last week said the company currently is performing better than that target but that the outcome for the year will depend on the health of the economy and the spread of COVID-19.
Schwartz said “The Way Forward” strategy realigns Cox brands to work together in new ways to help dealerships make better business decisions and prepare for an increasingly digital future. The initiative requires no monetary investment, a Cox official said, nor is it intended as a way to save money.
For instance, Manheim will work more closely with Cox’s vAuto used-vehicle inventory management software unit to help dealers acquire and sell cars, Schwartz said. Its Dealertrack unit, which includes dealership management system and finance-and-insurance tools, continues to work on enabling digital customer signatures.
And Clutch Technologies, which develops software for vehicle subscription services, plans an integration with Cox’s Xtime service platform to streamline vehicle pickup and delivery for maintenance work.
“You have to have a mindset to say, how do we get customers really comfortable dealing with their dealership in a low-touch way?” Schwartz said.