The car industry has suffered severe blows in the second quarter of 2020, according to the most recent ‘Branche Barometer’ of the Bovag. The corona crisis is hitting the departments responsible for new car sales with a sales decline of almost 45 percent the hardest of all departments within car companies.
People are less willing to buy a new car due to the economically uncertain situation due to the corona virus. In the second quarter of 2020, the turnover decrease in the departments responsible for the sale of new cars amounted to no less than 44.9 percent. Company-wide, including the used cars and maintenance departments, the average revenue decline was 31.19 percent. Car companies still showed a positive result of an average of € 14,767 per branch in the first two quarters of 2020. However, this is mainly due to the NOW scheme, which 72.7 percent of the companies affiliated with Bovag say they use. Without this scheme, the average result would have been negative with an average of – € 27,292 euros per location.
The fact that new sales are having a tough time this year was already evident from the fact that the Bovag had to adjust the forecast for sales numbers downwards. The quarterly figures, which show a sharp decline in turnover, seem to confirm this picture. As the NOW scheme will be cut back on 1 October, it is expected that layoffs will be made. “Although the market seems to be picking up modestly at the moment, we expect that staffing will be changed,” says Bert de Kroon, chairman of Bovag Autodealers. Remarkably, the decrease in the number of full-time employees is the lowest in Sales. “It turns out to be difficult to anticipate this in the personal occupation,” said De Kroon. According to him, young people with fixed-term contracts will soon be out of business, while their knowledge is desperately needed. On the other hand, he argues that further flexibility of the labor market is essential for entrepreneurs to be able to anticipate crisis situations.