Cox Automotive Briefing
The CEO of Cox Automotive has stated that the company was finding ways to keep its employees, clients, and partners healthy. Cox Automotive is innovating by offering a 50% discount on subscriptions to its products and services, through the Retail Solutions COVID-19 Assistance Program. Cox Automotive is also operating simulcast-only sales through its brand, Manheim. Detailed information is below.
What the Company has Communicated
Statement on COVID-19
- The CEO of Cox Automotive, Sandy Schwatz, released a statement on COVID-19 that was updated on April 9, 2020. In the statement, she said that the company was finding ways to keep its employees healthy and to keep businesses run by its clients/partners healthy. Schwatz also mentioned that Cox Automotive was doing all it could to prevent the Coronavirus from spreading further and ensure that it was delivering the best possible service despite the disruptions caused by the pandemic.
- The CEO also stated that the company was doing everything it could do to "keep the automotive marketplace up and running." She said that the company had promised to do its best for everyone, and people could count on it to help lead the industry during the Coronavirus crisis.
COVID-19 Ends Spring Bump in Used-Vehicle Values
- This press release by Cox Automotive estimated that the total used-vehicle sales volume declined by 18.4% year over year in March 2020.
- The press release states that there was an "unprecedented downturn in sales and market disruption caused by the COVID-19 pandemic." According to the chief economist at Cox Automotive, Jonathan Smoke, the "market and underlying economic conditions deteriorated rapidly in the second half of March,” and it is anticipated that the performance for April will be more severe. A decline was observed in the Manheim Market Report values, published by Manheim, a brand of Cox Automotive.
An Open Letter to Dealers By Dale Pollak, Executive Vice President, Cox Automotive
- In the open letter, Pollak stated that in his time as a dealer, he had witnessed disruptions and recessions that caused tough conditions in the auto retailing sector, but none compared to what dealers were currently facing as a result of the Coronavirus crisis.
- He stated that the Cox Automotive leadership team is thinking of ways to help dealers survive the current pandemic and get ready to take advantage of the opportunities that will arise when the market returns to normal.
- According to Pollak, the car industry is a cyclical business, and history has shown that every downturn is followed by an upturn. He added that COVID-19 had challenged one of the important beliefs that car business must be done through in-person engagements. He stated that Cox Automotive had been urging a change to this belief for the past several years, so that there is a shift from the industry being "primarily physical and in-person, to one that includes more personalized, digitally-driven engagements."
- He shared the informed viewpoint from Cox Automotive that said that its unlikely that the market will register a significant improvement in 30, 60, or 90 days.
Signs of a Recent Negative Economic Impact on the Company
- According to the executive vice president at Cox Automotive, Dale Pollak, data by Cox Automotive suggests that service volume and retail sales across the industry had slowed in the past few weeks. Showroom traffic was down by "over 80% on a year-over-year basis, the number of scheduled service appointments was off more than 50%, and the show rate on service appointments had dropped nearly 90%." This has hurt the company as it works with over 40,000 auto dealer clients globally who have been impacted by the COVID-19 crisis.
- According to Reuters, Cox Automotive predicts a negative economic growth in the second quarter in the United States and the company has withdrawn its forecast for 16.6 million new-vehicle sales. The chief economist at Cox Automotive, Charles Chesbrough, told CNBC that the situation was going to get worse as automakers saw big reductions in sales for the first quarter of the year.
Ways in Which the Company is Currently Innovating
Operating Simulcast-Only Sales
- To keep its customers safe during the COVID-19 crisis, Manheim, a Cox Automotive brand, is operating simulcast-only sales, where local, state, and national directives allow. The Simulcast-only sales are running as postcard sales, where the vehicles are shown as images only.
- The locations are closed to sellers and buyers, and no vehicles are allowed down the lanes. Manheim is also waiving the fees paid by simulcast buyers and sellers for now.
COVID-19 Assistance Program
- Cox Automotive has announced the 'Cox Automotive Retail Solutions COVID-19 Assistance Program.' The program will offer a "50% discount on subscriptions to products such as Autotrader Subscription Listings and Dealer.com Digital Retailing" during the months of April and May.
Employees Encouraged to Work Remotely
- To keep its employees safe as COVID-19 spreads, Cox Automotive has encouraged people who can work remotely to do so until Friday, May 1. This strategy is meant to keep the environment in its offices safer for those that must be onsite to perform their duties. Employees who must go to the office have been advised to avoid any face-to-face meetings if possible.
- The company has also asked its employees to avoid all international business travel, reduce client-essential domestic trips, and refrain from attending external events and large group meetings.
- Employees have been given government guidelines and encouraged to stay away from those who are sick, practice appropriate sanitation, and adhere to the 14-day quarantines at home if they traveled to Level 3 countries or came in close contact with those who have the virus.