Automotive News Canada - May 2020 - v2 - 4

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COVID-19 hampers Canadian
groups with U.S. stores
Varying stay-at-home
orders, reopening
timelines and economic
responses add to the
crisis of collapsing sales
By JOHN IRWIN
TORONTO BUREAU

THE CORONAVIRUS PANDEMIC
HAS made life even more complicated
for Canadian dealers with operations
in the United States, as they manage
travel bans and bureaucracies on both
sides of the border.
"It's a challenge trying to navigate through all the government programs and economic responses and all
that nonsense," said Terry Rafih, CEO
of Windsor, Ont.-based Rafih Auto
Group, which owns three locations
near Cleveland, Ohio, that sell seven
luxury brands.
"That's been the challenge, trying
to decipher between all of them."
The crisis has upended the North
American auto industry. Many provinces and states have closed showrooms and instituted stay-at-home
orders for residents, sending vehicle
sales plummeting.
The U.S. and Canadian governments have implemented numerous
economic aid programs for individuals and businesses, with varying eligibility requirements and benefits. The
border, meanwhile, has been closed
to nonessential traffic since midMarch, and the Canadian government
requires most residents returning
from other countries to isolate themselves for two weeks upon arrival.

OPEN HERE, CLOSED THERE
When it comes to allowing business
to reopen, states and provinces, as
well as both federal governments, are
moving at different paces.
That has made
it challenging for large
dealership
groups in multiple jurisdictions to keep
track of what
is allowed in
different locations.
Atlantic
Canada-based
Steele Auto
Group owns a
dealership in
TERRY RAFIH
Luling, Tex.,
about 100 kilo- CEO, Rafih Auto Group
metres east
of San Antonio, and the governor
reopened the economy sooner than
many other states and provinces.
"We found in Texas that they reacted about two weeks later than we
experienced the whole panic and the
immediacy of the closures and what it
meant . . . so they didn't see the drop-off
in service and car volume until early
April," said COO Kim Day.
With the reopening of the economy,

We used to visit
those [U.S.]
stores once a
week. Well, I
haven't been
there in ...
weeks.

For his U.S. stores, Rafih Auto Group
CEO Terry Rafih has found it difficult
"trying to navigate through all the
government programs and economic
responses." F I L E P H O T O

In an April 20 news release, publicly traded AutoCanada Inc. said
new-vehicle sales were down about 60
per cent in both the United States and
Canada during the first two weeks of
April compared with a year earlier.
Used-vehicle sales were down about 45
per cent during that time.
AutoCanada sells 11 brands in the
United States at stores it acquired in
2018, mostly near Chicago, Ill.
Parts, service and collision-repair
revenue fared better at AutoCanada's
Canadian stores than in Illinois,
with revenue down 33 per cent north
of the border compared with 58 per
cent south of it. Edmonton-based
AutoCanada said the U.S. figures
reflect "the more restrictive 'shelterin-place' orders imposed by Illinois."
Rafih said there has not been
"that much" of a difference in operating stores under Ohio's stay-at-home
orders versus Ontario's, though he is
unable to visit his U.S. stores as much
as he did prior to the travel restrictions.
"The only thing that's a bit of a
problem for us is traveling to the U.S. I
can go. I have [the appropriate] visa. I
can live in the U.S., actually. But when
I come back, I have to quarantine for
14 days even though I haven't missed
a day of work. I come into the office
and do my thing.
"We used to visit
those [U.S.] stores once
a week. Well, I haven't been there in ...
weeks."

"I fully expect that Texas will rebound
faster than Canada will, at least in the
short term."
Steele Auto purchased its Texas store
in February, just before
COVID-19 began to
spread more widely
in North America and
NATION NAVIGATION
forced governments to
shut down wide swaths
Dealers indicated
of the economy. As a
they have been tryresult, many of the proing to come to grips
tocols the group would
with what the various
normally follow after an
stay-at-home orders
acquisition were thrown
entail in both countries
out the window because
as well as how finanthe group's leadership
cial assistance offered
team was unable to travby the federal, state
el to Texas, Day said.
and provincial govShe and other manernments affects their
agers visited the store
dealerships and their
in late February as the
employees.
deal closed, thinking
Notable U.S. aid proWhen Steele Auto Group
they would soon return COO Kim Day was closing a grams include disbursand with no idea that
ing a US $1,200 (Cdn
deal on a Texas dealership,
the world was about
$1,666) cheque to many
she had no inkling how
to drastically change
adults, expanding elithe pandemic would make
"overnight."
gibility for unemploythe transaction "the most
"It was clearly the
ment benefits and prodifficult thing I've ever
most difficult thing I've had to deal with in my
viding US $600 (Cdn
ever had to deal with in professional life."
$830) per week on top
my professional life,"
of those regular benFILE PHOTO
Day said.
efits through July, in
"When we were in Texas, COVID
addition to hundreds of billions of dolseemed like a very distant issue.
lars in loans for businesses. Many pro"I don't think I could have imaggrams, however, have been plagued by
ined in the middle of February that
delays and funding shortfalls.
within a month's time we'd be down 50
"We finally feel like we understand
per cent in our workforce, we'd have
what it is and how it impacts us and
showrooms shuttered, and we'd be
what it means for us, at least in the
dealing with all of the sanitizing and
short term," the Steele group's Day
health and safety protocols we've been
said.
thrust into."
In April, AutoCanada indicated
that it would "avail itself to all applicaU.S. PERFORMANCE
ble government subsidy and deferral
As of late April, Day said, the Texas
programs in both Canada and in the
location was down about 50 per cent
U.S." and that it expected to "realize
compared with its budget, roughly in
some benefit" during the second
line with sales results in Canada.
quarter. - ANC

Dealership
manages
digital
turnaround
in pandemic
Nissan store was
already leaning
toward online, and
the coronavirus
quickened the pace
By DOUG FIRBY

CALGARY CORRESPONDENT

AMID THE COVID-19 CRISIS
that closed Ontario showrooms
in April, a dealership in Ottawa
pivoted to online sales to keep
the metal moving. The result?
417Nissan sold 20 new and 28
used vehicles in April and without a single test drive.
The credit goes to a strategy
that turned the showroom into a
classroom and focused on training sales staff in the effective
use of online tools, said Robert
Smoczynski, director of sales
operations at AutoCanada Inc.,
an Edmontonbased group
that owns
417Nissan as
well as 49 other
dealerships in
Canada and 12
in the United
States.
The company was planning to shift
Smoczynski:
heavily into
When the
online sales
pandemic
before COVID- emerged,
19 struck, said 417Nissan was
Smoczynski,
forced to roll
who oversees out its online
14 dealerships software "really
that represent quickly."
AutoCanada's P H O T O :
Nissan,
AUTOCANADA
Infiniti,
Hyundai and Subaru brands.
When the pandemic emerged,
"We were forced to roll it out
really quickly."
But software can only do so
much without proper training
to help the sales team make the
most of it.
Smoczynski said efforts
were already under way to turn
around the underperforming
417Nissan, and when Ontario
issued stay-at-home orders the
showroom was transformed into
a massive training area for the
eight sales staff that management
was able to retain from a pre-pandemic peak of 10.

CLASS AMID THE CARS
Each day, staff and managers gather safely distanced from
one other from 9 to 10 a.m. and
take a deep dive into a specific
topic. Notes on paper sheets are
taped to the showroom cars. One
day, the topic might be running
through the email sales script;

SEE NISSAN PAGE 9

Automotive News Canada - May 2020 - v2

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