Delivery exit strategy

  19 April 2020

Guest blog by Robert Forrester

Last week, Auto Retail Network discussed some of the issues around delivering cars to customers and the balance between keeping the UK economy going as much as possible and keeping the UK population as safe as possible.

This is the big question of the moment and it is alive and kicking in my house. My wife likes the lockdown and feels very happy with it; I am very much concerned about the economic impact of all this in the short and the long term. Populations are only healthy in the long run with a strong, sustainable market-based economy.

Obviously to an employer, safety is crucial. We have, as a business, only had one confirmed case to date to my knowledge, and I am delighted the colleague is now out of hospital and on the mend.

We could eliminate all risk if we stopped all operations. But is that the right thing to do? Surely, if a key worker needs a replacement car after a breakdown or accident, why shouldn’t it be possible (with all the correct safety procedures in place) for a delivery to take place? That has to be in the national interest, to keep people on the road to do their vital work – as long as it is not abused so as to work against the principles and spirit of the lockdown.

I have seen emails from the Government spelling out very clearly that home deliveries of cars, with the right precautions, are acceptable under the current lockdown. That is an important clarification. As an aside, last week at home we had a new washing machine delivered and it is not that much smaller than a small car!

The Government is also keen for logistics to keep moving and I believe this is why the likes of Cazoo have announced, with their logistic partners, that home deliveries will recommence. Of course, this puts them at a competitive advantage compared to companies that do not follow suit in the short term.

This position of course assumes home deliveries can be done safely. I actually think they can, as long as precautions are taken, but I remain concerned about part exchanges. If we are expecting these to be driven by the deliveryman, how do we know the surfaces are safe in the car when he gets in to drive it? Are we going to take the customer’s word for it that they have left the car alone for a suitable period for the virus not to be present? It sounds messy to me.

Perhaps we have to take the keys from the customer and then go back 24 hours later to pick it up!

Moreover, franchised retailers are not currently set up for mass home deliveries. Aside from the safety issues around part exchanges, how do drivers get home if there is no part exchange, given the current, limited public transport options? Do we send two vehicles for each delivery? The economic costs of such deliveries are massive and, in low margin sectors like ours, are not sustainable unless the customer pays incrementally for them.

Probably more relevant, most of the resource of the sector is on furlough and the economics of defurloughing people to make a small number of expensive home deliveries seems difficult, and unlikely to get much traction where people are in survival mode and risk-averse.

It strikes me the sector and the manufacturers should be lobbying Government to adopt a ‘click-and-collect’ approach. The bulk of our service departments in the group are operational for key workers, and we have general managers on each site. The showrooms are therefore seeing a small number of service customers each day, with appropriate social distancing.

Surely, the way to get the sector moving with deliveries (which, on new cars, is vital to get the new car factories working across the globe) would be to extend the click-and-collect model. To be able to deliver cars safely from the dealerships at a specified time to allow for social distancing would allow any part exchange to be quarantined for days to ensure they were safe for our employees to move them later.

This could be done for key workers first, I guess, but there are no more journeys involved than a home delivery, and these appear to be allowed for car deliveries for key workers and everyone else. This has to be debated. I think the time is now.

Some may argue I am raising this issue far too early and we need to sit at home at wait for the Government to act. In my view, the Government is trying to balance a lot of things and will not always get everything right. It is actually doing a great job, in my opinion, in almost impossible circumstances.

I accept I am probably in the camp worried about the economy as much, if not more, than the virus, and that is probably because I am responsible for the employment (and well-being) of 6,000 employees and, by extension, their families. With the Government appearing to have agreed to home deliveries, the sector needs to now make the case for click-and-collect deliveries from the closed showrooms.

I am not advocating showrooms being open for sales, test drives and such like at the moment, just controlled, safe deliveries. Now is the time to have the debate and discuss these matters with the Government. Our sector employs hundreds of thousands and we need to ensure it has the chance to rebuild and quickly.

This is not going to be easy and anyone who thinks things are going to go back to ‘normal’ any time soon is, in my view, delusional. Government knows this and is trying its best. I am sure they will listen.

Robert Forrester
CEO
Vertu Motors

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