Dealership closures begin; states, cities could force more

Two dealerships in California have closed their doors for two weeks out of precaution amid the spread of the novel coronavirus, and stores in other states may be forced to follow suit as municipalities and governors across the U.S. take broader action.

Capistrano Toyota, in San Juan Capistrano, says on its website and in a recorded phone message that it has closed because of the COVID-19 pandemic, which over the past week in the U.S. and abroad has caused unprecedented event cancellations, school closures and business disruptions. Claremont Toyota also has the same message on its website.

"We care about the health and safety of our employees and customers!" the dealerships say on their websites. "Due to the COVID-19 virus, Capistrano Toyota will be closed for two weeks for the safety and protection for all. God bless and stay safe."

Toyota, in a statement Monday said: “The owner of Claremont Toyota and Capistrano Toyota has decided to close both stores for two weeks due to concerns over the COVID-19 virus. We are not aware of any of the employees of these dealerships having tested positive for the virus, but we understand that the stores were closed as a precaution. Toyota is continuing to monitor the COVID-19 virus situation closely and will take any appropriate action moving forward.”

Several municipalities and states have begun to order shutdowns of restaurants, bars, casinos and other nonessential businesses as a way to try to control the spread of the virus.

Also in California, San Francisco, Santa Clara, San Mateo, Marin, Contra Costa and Alameda counties are issuing a shelter-in-place order effective at midnight until April 7, according to a memo from the California New Car Dealers Association. The order will require nonessential businesses in those counties to close. 

The association said auto repair is listed as an essential business, so dealership service and parts operations should remain open.

“Whether it applies to the sales department is an open question,” said Brian Maas, president of the California association.

Maas estimates at least a few hundred dealerships will be impacted by the order and the association is seeking further clarity regarding sales departments.

More emergency orders

The city of Philadelphia, for example, is ordering that only essential businesses such as grocery stores and pharmacies remain open in the city beginning at 5 p.m. Monday through at least March 27. A news release from the city does not list automobile dealerships as essential, though it was not immediately clear whether they would be forced to close.

Automotive News could not immediately reach representatives from the Pennsylvania Automotive Association or the Auto Dealers Association of Greater Philadelphia for comment.

The governors of New York, New Jersey and Connecticut announced Monday that they would close restaurants, bars, gyms, casinos and other entertainment venues as of 8 p.m. Monday.

Mark Schienberg, president of the Greater New York Automobile Dealers Association, said new-vehicle dealerships do not appear to be part of New York states closings.

“Dealers are exempt so far from having to close or restrict their hours of business,” he said. “So they can operate as normal.”

Schienberg said he has fielded numerous calls from dealerships with concerns over the coronavirus and the possibility that dealerships may have to close their doors. He said to help with social distancing, the association is suggesting dealers spread out operations if they can, such as to different buildings or have employees for business development centers work at home, if possible.

New Jersey's order also limits, in line with Centers for Disease Control and Prevention guidelines, gatherings to fewer than 50 people, as well as other measures. 

“It’s unclear if, at this time, that means 50 total customers” or total people in the store with employees counted, said Jim Appleton, president of the New Jersey Coalition of Automotive Retailers. 

At any rate, New Jersey dealerships remained for open business on Monday afternoon, although NJ CAR had recommended to its dealers that they consider themselves non-essential retail, and thus would be affected by the curfew, until it receives further clarification by the state. 

Appleton acknowledged things could change quickly. “It’s fluid,” he said. “I wouldn’t be surprised if this changes by the end of the day or sometime tomorrow.”