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Automotive response to Boris Johnson's announcement regarding car showrooms reopening on 1st June 2020

27 05 20 car dealership
John Roberts, Head of Automotive and Roadside at Colliers International commented:The latest announcement from UK Prime Minister, Boris Johnson, stating that car dealerships can open their showrooms from 1 June 2020 is very welcome news. Many occupiers have been working on their return for several weeks now, so this gives greater clarity and guidance that their plans are on track. Most dealers would also perceive that there is pent up demand in the marketplace, partly due to government guidance to use other transport modes other than public transport, which could be good news for their future sales.
 
“There are however several measures that occupiers, landlords and the UK Government will need to consider ahead of the reopening to ensure that the return to the physical showroom will work for businesses, staff and customers” 
 
“ Given the new procedures that will need to be implemented to ensure dealerships meet official requirements due to social distancing and health and safety obligations, occupiers will need to ensure that their physical stores are a safe space that customers feel confident to go in. This will potentially mean new showroom layouts and renovations to accommodate for additional space which will enable people to avoid contact with one another. 
 
“Furthermore, it will be crucial to communicate to customers about their new health and safety procedures, including PPE, and the continuous cleaning of the showroom and vehicles.”

 
Property Issues

“The landlord and tenant collaboration is a two-way street. It’s imperative that property owners and occupiers engage with each other to form a partnership moving forward. 
 
“While their dealerships have been closed, occupiers should not have been paying their rates. They could be claiming business rates relief for their properties.
 
“ Furthermore, during lockdown, owners and occupiers ought to have been reviewing their property portfolio with their real estate adviser taking into account  proposed sales forecasts to reflect new market conditions. If dealers fall into this category, they should be thinking about identifying their property requirements moving forward, for example how they might use underutilised space and buildings and recognising where additional space resource will be required. They might need to consider: 
 
  • Including more storage space and customer parking facilities.
  • Re configuring their showroom due to social distancing and  the potential change in purchasing habits including online sales , which perhaps could incorporate additional handover facilities for click-and-collect purchase options, with safe distancing.
  • Due to perceived increase of online retailing, there may be a requirement to have further additional compounds to hold stock. There might even be opportunities to multi-franchise as more online businesses will require bigger compounds. They will also potentially need to look at their options to release value from underutilised space. 
  • There might be the opportunity to increase footfall at their dealership through complimentary uses, such as adding a drive-thru coffee unit etc.

“If finance is an issue, there could also be the option for owner dealers to undertake a sale and leaseback to release cash. 

 
Sustainable driving

“Lastly, from a sustainable automotive industry perspective, the Government could consider introducing a new scrappage scheme similar to what was announced in the 2009 UK Budget to encourage British motorists to purchase a new more efficient or an alternative fuel vehicle.”

Related Experts

John Roberts

Head of Automotive and Roadside

Automotive and Roadside

Birmingham

John has worked within this niche sector for many years and has been a member of the Colliers International Automotive and Roadside Team for over 15 years. His specialist areas of expertise include motor dealerships, car supermarkets, after sales retail networks including motorist centres, trade counter, drive thru' and roadside retail properties.

He acts on behalf of some of the lead investors, developers and occupiers within these sectors dealing with professional, agency, development and investment matters. His clients include, Arnold Clark, Volkswagen Group, Johnsons Cars, AEW, EG Group, CBRE Investors, Formula One Autocentres and Listers Group.

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Hannah Zitren

Associate Director

Marketing & Communications

Manchester

I am responsible for media relations and generating coverage in top tier broadcast and print media. I work across a range of Colliers’ UK & Pan-EMEA business lines advising on their strategic and tactical PR needs.

My role includes:

·         Developing and executing PR plans for the various business lines to help promote their key messages across all aspects of the media - print, broadcast and social.

·          Media evaluation and reporting objectives, targets and successes across the business.

·         Reputation management and crisis management.

·         Media training.

·         Media engagement: setting up meetings with top tier media and various internal spokespeople to continuously expand and build a presence with property and vertical media network.

·         Consistently delivering service excellence, meeting with business heads of a regular basis and trying to influence the research as much as possible to ensure our content has a strong enough news hook.

·         Key campaigns that I work on include MIPIM; MAPIC; REVO; Midsummer Retail Report; IHIF; Cities of Influence in addition to a host of all alternative property sector research reports.

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