COVID-19 crisis is spurring long-term changes, execs say

Top sales executives at Toyota Motor Corp. and BMW expect the shift to online transactions and remote service appointments will continue after the coronavirus pandemic subsides as part of fundamental changes to the auto industry that could increase value for the customer.

Jack Hollis, general manager of the Toyota Division at Toyota Motor North America, and Bernhard Kuhnt, CEO of BMW of North America, said on a webcast last week that the industry has an opportunity to refine some parts of the selling experience and come out of this crisis in a better position.

"I don't know that I want to go back to what we just came from," Hollis told KC Crain, group publisher of Automotive News. "I want the 17 million SAAR, but some of the ways to do it, there's got to be more value in it for the customer. To think we're just going to throw some sort of incentive on it and everyone's going to come running back at the same speed ... I'm not so sure that's healthy not only for us but for the customer. The focus has to be: What's healthy recovery for the customer?"

Hollis said he envisioned an increase in online sales even after dealer showrooms reopen, suggesting they could grow from 10 percent of sales now to one-third. Changes to vehicle service, prompted by social-distancing measures, also will likely continue.

"We've already been doing it, this has just accelerated it," Hollis said. "What I think most of all comes out of this, is the consumer is going to have a lot more ability to be in control of the process."

Kuhnt said at BMW there may not be as much emphasis on chasing volume in a race to be the top-selling luxury brand while risking investing in slow-selling segments.

"We will make clever decisions going forward to not burden our dealers and not burden ourselves with that risk," he said. "I think there will be different behaviors coming out of this."

Both executives said they have been in constant communication with their dealer networks through the crisis, with their top priority being concerns over liquidity and financial support.

"We feel really good, not because things are good, but because we're moving as one," Hollis said. "As things bottom out in April, we know that on a daily basis we can react."

BMW and Toyota, for now, are targeting the beginning of May to restart production at their U.S. manufacturing facilities, but they said production and sales would begin slowly and the industry likely would not be back to normal until August or September.

"Our forecast is that we'll be back to a regular basis ... at that point," Hollis said. "We all want to get back to normal quickly, but if we do it too quickly there's a potential of putting more people at risk. As an industry, we have to keep putting people first."