A REPORT by Cox Automotive highlighting the effects of the COVID-19 pandemic has found that while one third of motorists are delaying buying a vehicle, the “right deal” may spur buyers into purchasing and that marketing is the key to gaining customers.

In the US, Cox Automotive has studied the automotive industry over the past six weeks and found emerging trends that reveal consumers are beginning to show the first signs of positive movement.

“The percentage delaying sales and service has flattened, the window for delayed purchases is pulling closer and optimism for a return to normal has moved earlier in the summer,” the report said.

“With signs that social distancing seems to be working in many parts of the country, consumers in the US are growing more optimistic.”

The Cox report said that more than one third of buyers were delaying their vehicle purchase “however almost half of those could be spurred into action if they find the right deal”.

“Marketing the right incentives to the right consumers will be vital at this time on the road to recovery,” the authors said.

The Cox report said it will still take time for consumers to “feel comfortable”, with most respondents to the survey indicating it could take up to three months after US shelter-at-home mandates are lifted.

“Similarly, consumers continue to show resistance to visiting dealerships so it will remain vital for dealers to promote and offer safety measures to prospective customers, long after mandates are lifted,” it said.

But there remains some bad news. The report said US dealers are struggling, with staffing levels down more than 50 per cent and more than two in 10 are now worried this might be the end of their dealership.

More than 80 per cent of US franchised dealers have applied for federal assistance, while independents lag significantly behind at 48 per cent.

Meanwhile, research in Australia by ACA Research, in partnership with TEG Insights, shows two thirds of small-to-medium enterprises (SMEs) reported a decline in revenue due to the COVID-19 crisis over the past couple of weeks and more than one in four have already had to temporarily or permanently close their operations.

“Accordingly, it is not surprising that 74 per cent are concerned about the survival of their business,” ACA Research managing director James Organ said.

ACA Research said that to combat financial pressures, SMEs have been actively looking for ways to reduce their costs.

“The most common measures have been reducing working hours and wages, terminating staff and forcing employees to take unpaid leave,” it said.

Many SMEs are also reaching out to their landlords and suppliers to negotiate better deals although ACA research this week showed that only 14 per cent of SMEs had approached their landlord prior to the federal government’s rent relief announcement.

“We expect this number to increase dramatically in the next few days,” Mr Organ said.

“Managing the financial and emotional pressure is clearly taking its toll on SME business decision-makers, with 74 per cent worried about their own health and wellbeing.

“Balancing the implementation of survival plans, laying off staff and managing their own personal and household expenses is a significant burden for the majority.”

By Neil Dowling