The coronavirus pandemic had ripple effects for vehicle listings companies this spring as government restrictions on social and business activity throttled demand for new and used vehicles.
Dealerships looking to conserve cash early on in the crisis turned to their marketing budgets to trim costs, and subscriptions to third-party vehicle marketplaces became one expense-reduction target. Several of the largest U.S. listings sites in turn reported increased dealership cancellations and suspensions in late March and April.
The listings companies also moved quickly to discount rates to help offset the impact of fewer sales and lower revenue for their dealership customers — actions that helped prop up their clients but strained their own bottom lines.
Yet several said the trend line appears to have stabilized, if not improved, as prospective car buyers increase activity on online shopping sites.
Initially, "we heard a lot that it was just time to be fiscally tight," said Scott Fanelli, vice president of dealer sales at listings company Edmunds. "Our counter to that is, there's going to be a huge pent-up demand at the end of this, and we want to make sure that you're in front of those customers now as they're doing research."
Edmunds, in Santa Monica, Calif., cut dealerships' rates by half in April and May and 20 percent in June. It also experienced "significantly higher than normal" churn in its dealership client count in the early days of the pandemic, Fanelli said, though that has stabilized with the company experiencing "record low churn" over the past 45 to 60 days. Edmunds, a privately held company, would not disclose the number of dealerships that canceled services. It had roughly 7,000 dealership clients early this year.