For many dealerships, the coronavirus pandemic has upended their operations, forcing changes that just weeks ago would have been unthinkable.
One dealership group last week considered floorplanning used-vehicle inventory, while another dealership cut hours and was considering layoffs as the sales outlook worsened.
Sales already were nosediving in many areas of the country, and some dealerships were forced to close last week because of orders from state and municipal governments. The rapid decline in circumstances has dealers making tough decisions on how to trim costs and generate cash to stay afloat over the next few weeks and months.
Accountant Ken Rosenfield, managing partner of Rosenfield & Co. with offices in Florida, New Jersey and New York, said last week that he's been fielding calls from dealer clients "nonstop." As of Tuesday, March 17, none of the clients he'd spoken with had laid off anyone.
"But we have seen them go into cash conservation mode," said Rosenfield, whose firm works with more than 400 dealerships. "So they are tightening their internal controls to conserve cash and make sure that there's no theft going on because we've seen in rough times people freak out."
Jodi Kippe, managing partner of retail dealer services at accounting and consulting firm Crowe, said dealer clients are meeting multiple times daily to adjust to fast-moving federal and local government changes.
"If you look back at the recession, those that reacted the quickest were better positioned," Kippe said. "Some that maybe didn't react as quickly last time, they might react a little bit faster."
Though the pandemic has reached all 50 states, the impact has been worse in certain areas. Some dealerships early in the month were reporting robust sales.