Car dealers allowed to open their doors again

From Wednesday May 13, new and used car dealers are allowed to open their doors again under strict trading risk-adjusted measures, hygiene and social distancing restrictions.

Sales of cars, bakkies, trucks, motorcycles, caravans and trailers may recommence.

Emergency repairs may also be carried out on vehicles, which includes cars that are overdue for a service.

The department of trade, industry and competition on Tuesday announced the much-awaited directions regarding the sale of cars and emergency automobile repairs during level 4 of the Covid-19 lockdown.

Under the slightly relaxed lockdown restrictions that took effect from May 1, car factories were allowed to open with half their staff but dealers had to wait longer to find out when they would be allowed to start selling vehicles.

Initially automotive dealers could carry out only emergency vehicle repairs under level 4, with vehicle sales allowed again under level 3 and routine servicing under level 2.

After lobbying from the motor industry, trade & industry minister Ebrahim Patel gazetted directions on Tuesday evening, which allowed for the following car trading activities during alert level 4:

• Trade in new and used cars;
• Wholesale trade of new and used cars by OEMs and importers;
• Export and import of all category of cars through national ports of entry under strict guidelines; and
• Trade-in purchases, car lease scheme returns and wholesale trading of used cars.

Car sales will be phased in under the following conditions:

Under phase one, all dealerships and used car outlets will operate with up to 30% of employment subject to a maximum of one employee or customer per every nine square metres of floor space, provided that small businesses may operate with a minimum of five employees.

The majority of car sales will be done remotely via the internet or e-commerce or telephone. Personal contact will be kept to a minimum and only on appointment under strict hygiene and social-distancing conditions in line with the regulations.

Test drives will be conducted on appointment only. Home delivery of vehicles with full sanitisation will be mandatory. Where possible, electronic, or virtual signatures will be used for finance and insurance documentation. Car auctions for all categories will be conducted online.

Under phase two, all dealerships and used-car outlets will operate with up to 60% of employment; a limited number of customers will be allowed in the dealership under strict hygiene and social-distancing conditions in line with the regulations; and remote vehicle sales will continue for those potential customers with access to online services.

Under phase three of car sales restrictions, from June 8 until lockdown alert level 4 is lifted, all dealerships and used-car outlets will operate with up to 100% of employment; customer on-site contact will be allowed, but kept to a minimum while remote vehicle sales are encouraged; test drives can be arranged on site by appointment only, and under strict hygiene conditions, including fully sanitised cars; on site collection and deliveries of fully sanitised cars will be allowed under strict hygiene conditions with an option of home delivery if possible; and car auctions for all categories will be conducted online and limited physical contact will be allowed for viewing before the auction under strict hygiene conditions.

The directions also state that all vehicle dealerships must implement health and safety measures including the disinfecting of the premises, maintaining social-distancing protocols, and ensuring that all staff and customers wear a cloth face mask.

Testing centres

Roadworthy assessment and testing centres, and other testing stations are also operational under the new directions.

Auto electricians, tyre fitment centres, auto body repairers, windscreen replacement centres and other related auto service centres are also allowed to open immediately, under the same staggered workforce levels and hygiene restrictions as car dealers.

“There is an overwhelming sense of relief that we can get back to trading,” said Mark Dommisse, chair of the National Automobile Dealers’ Association (Nada).

“We don’t know how strong the market will be but we have to look at the positives and get back to trading again. The fallout will still be big, but a line has been drawn in the sand. We can get the economy going.”

Dommisse said that from a safety perspective, dealerships generally have low footfall and spacious facilities, ensuring effective social distancing. Appointment scheduling and access control measures, which were largely in place before the crisis, can ensure that the number of people within facilities at any given time is monitored and controlled, he said.

The lockdown has had a devastating effect on the local automotive industry, bringing manufacturing and retail industry that accounts for almost 7% of SA’s GDP to a virtual standstill.

New-vehicle sales ground to a near halt in April due to the Covid-19 hard lockdown, which forced the stoppage of all motor manufacturing and sales.

The industry total of 574 cars, bakkies and trucks recorded sold in April represented a 98.4% decline compared with April 2019.

The previous month, with the country hit by physical distancing from the middle of the month and lockdown from March 27, new-vehicle sales dropped 29.7% to 33,545 units compared with  a year earlier.

That leaves year-to-date new-car sales down 28.1% compared with  2019, with sales of light-commercial vehicles (bakkies and minibuses) plummeting 38.5%, medium-size trucks and buses reduced by 27.3% and heavy trucks by 29.9%.

“This directive is undoubtedly good news for motorists and the motor industry alike," said George Mienie, CEO of online vehicle sales portal AutoTrader.

"Based on an AutoTrader survey, the financial well-being of a whopping 65% of vehicle-buying consumers in SA has been negatively impacted by the nationwide lockdown. Many (30% to be precise) are under pressure to replace their vehicle within the next four weeks. This is being reflected in a massive increase in online searches.

"The highest number of car searches in Level 4 period was recorded on 10 May; we recorded over 1.3 million searches on that day alone. In the last two weeks, enquiries to car dealers have risen by an astounding 69%. It is clear that motorists are desperate for the motor industry to open its doors."