What we can learn from China's virus experience

A nasty, invisible and remorseless enemy is taking American lives and bringing our auto industry to a standstill.

"What happened in China? What can we learn from it?" our clients want to know. U.S. auto industry leaders are coming to us with three pressing questions.

1. How long will the COVID-19 pandemic last in the U.S.?

Get ready for months — not weeks — of sustained vigilance. Americans might not be out of danger until at least June. Even that timing looks optimistic.

Here is why: China needed 76 days of relentless efforts to get from the Wuhan total lockdown in late January to its first day with no new COVID19-related deaths reported — Tuesday, April 7.

The People's Republic is enforcing a strict regimen of temperature checks, quarantines and government-sanctioned phone apps that display your health status in color codes in real time (red or green).

When Chinese leaders issue directives, its 1.4 billion citizens follow orders. "No mask, no going outside." Failure to do so means jail time. Period. America has not adopted anything close to China's aggressive programs. China also largely contained the virus in Hubei, the province where Wuhan is located. In the U.S., the virus has taken hold in cities from coast to coast. Clearly, therefore, our timeline will be longer.

2. What happened to China's auto market?

China is home to tens of thousands of car dealerships. In normal times, they deliver about 2 million cars a month. But in February, the Chinese economy came to a standstill. Most dealerships closed. Customers stayed home. Sales collapsed 80 percent.

March was a little better, with sales down by about half. April will be another improvement. "April is going to be much better. The recovery trajectory is starting," one executive at a global Tier 1 supplier told me this week.

U.S. sales could follow a similar pattern. It is no secret that our April sales will be in the gutter. May will be a little less terrible and June should mark the start of recovery.

3. What will be different in the future, short term and longer term?

If China is any guide, think of the COVID-19 battle in three phases. First comes a short period of stunned disbelief, panic buying and hunkering down. Then follows seven to eight weeks of anxiety and boredom, wondering when the nightmare will be over. That will be our April and May. Then, in June, we will start adjusting to a new normal when people carefully return to work.

How carefully? Even with no new deaths reported, China remains extremely vigilant. There is a total ban on foreigners entering the country. Masks and temperature checks are still mandatory. There are other scars — thousands of small businesses have gone bankrupt.

What about longer term? This is where things get more interesting, a little more optimistic.

Disasters can be the handmaidens of innovation. Chinese dealers are already starting to win back customers with inventive methods, powered by new technologies.

One example: Geely is offering completely contactless sales and service. Buy a Geely online and the car will be disinfected and delivered to your driveway. Separately, a drone delivers the car keys to your porch or balcony.

Many Chinese dealers report sharp rises in virtual-showroom viewings.

Before long, contactless delivery could become an industry standard. Other things will change, too. Who will want to do test drives with a random salesperson? Or walk into a crowded showroom? Or borrow a loaner without a certified deep cleaning?

"Even once the current crisis subsides, consumers will demand an end-to-end online contactless car-buying experience, including instant finance approvals and home delivery," says Andreas Hinrichs, CEO of Digital Motors.

America's car business will recover from this once-in-a-hundred-years storm. But heightened concerns about personal health and safety will forever alter the art of building, selling and servicing cars. Start making adjustments now to win the future.