In what is an unprecedented situation due to the Coronavirus pandemic, The Motor Ombudsman has conducted a survey of its accredited businesses to find out how they are adapting to the ‘new normal’, and to identify how the Ombudsman dedicated solely to the automotive sector can best tailor its support going forward. The study was designed to complement the survey of Code-accredited businesses that is conducted by the body every year to gather feedback on its services.
When asked about the effect that COVID-19 has had on their business, it is not unexpected to read that nearly two-thirds (61%) of participants explained that the onset of the virus has had major repercussions on their organisation, with a further 36% stating that there had been some effect on their activity. Only 4% said that there had been no real impact. These statistics were echoed by the fact that around three-quarters (77%) of businesses that took part in the research expected their revenue to decline versus that targeted at the beginning of this year, with only 14% estimating that their income would stay the same as their forecast for 2020. In addition, just 8% of participants expected higher than planned earnings by the end of December. Encouragingly, only one business stated that they may not be able to stay open. Reasons cited for a lower turnover, included the MOT extension delaying customers taking their car to a garage for the annual test, the need for social distancing by staff and customers, and garages having to close their doors temporarily during the lockdown period.
When asked about what businesses had experienced during the lockdown period, 94% of respondents that took part in the poll, explained that they had put staff on furlough, with 68% of those questioned saying that they had members of staff expressing concerns about returning to work. Furthermore, 60% of organisations had seen reduced demand from consumers, around 45% had found it difficult to obtain personal protective equipment (PPE) and parts, whilst 42% had reported increased costs, with cash flow issues affecting 37% of those polled.
During the past few months, it has been widely publicised in the media about garages and car dealerships going above and beyond to help others in a time of need, and Motor Ombudsman-accredited businesses were no different. The poll revealed that 81% of businesses surveyed had assisted Key Workers and the emergency services during recent weeks. Initiatives that were introduced, included offering free labour and discounts on parts, providing courtesy cars to keep people on the move, and giving customers the option to pay interest-free monthly instalments to make having work done on their car even more affordable.
With the Coronavirus continuing to dominate the headlines, challenges remain for Motor Ombudsman-accredited businesses. Some of the specific hurdles mentioned were namely, having to purchase expensive PPE, parts suppliers experiencing a reduce number of deliveries, staff remaining on furlough to comply with social distancing requirements, having to build a business back up with fewer employees, continued uncertainty estimating demand with some customers facing financial hardship, and higher car prices.
Now that MOTs have been made mandatory for cars needing tests from 01st August, over three-quarters (80%) of garages are looking at a higher than normal volume of MOTs in the coming weeks. Combined with delayed MOTs since March this year, businesses are also concerned that there may be double the number of tests for the October 2020 to January 2021 period, followed by a drop in the test volume from next April through to July due to the regular flow of MOTs being out of kilter.
The survey of Motor Ombudsman-accredited businesses was conducted between 21st July and 8th August 2020.