From Wednesday, you are allowed to buy cars again

The local motor industry is breathing a sigh of relief after it was announced that from Wednesday, new and used automobile dealers are allowed to open their doors again - under strict risk-adjusted trading measures, and hygiene and social distancing restrictions.

Sales of cars, bakkies, trucks, motorcycles, caravans and trailers may recommence.

Emergency repairs may also be carried out on vehicles, which includes cars that are overdue for a service. 

The department of trade, industry and competition (DTIC) on Tuesday announced the much-awaited directions regarding the sale of cars and emergency automobile repairs during alert level 4 of the Covid-19 national state of disaster.

Under relaxed lockdown restrictions that took effect from May 1, car factories were allowed to open with half their staff, but dealers had to wait longer to find out when they would be allowed to start selling vehicles.

Initially, automotive dealers could only carry out emergency vehicle repairs under level 4, with vehicle sales only allowed again under level 3 and routine servicing under level 2.

After lobbying from the motor industry, minister Ebrahim Patel gazetted directions on Tuesday evening that allow for the following car trading activities during alert level 4:

• trade in new and used cars;
• wholesale trade of new and used cars by OEMs (original equipment manufacturers) and importers;
• export and import of all category of cars through national ports of entry under strict guidelines; and
• trade-in purchases, car-lease scheme returns and wholesale trading of used cars.

Phased approach

Car sales will be phased in under the following conditions:

Under phase 1 (from May 13 to 23), all dealerships and used car outlets will operate with up to 30% of employment subject to a maximum of one employee or customer per every nine square metres of floor space, provided that small businesses may operate with a minimum of five employees.

The majority of car sales will be done remotely via the internet (e-commerce) or telephone. Personal contact will be kept to a minimum and only on appointment under very strict hygiene and social distancing conditions in line with the regulations.

Test drives will be conducted on appointment only. Home delivery of vehicles with full sanitisation will be mandatory. Where possible, electronic, or virtual signatures will be used for finance and insurance documentation. Car auctions for all categories will be conducted online.

Under phase 2 (from May 25 to June 6), all dealerships and used car outlets will operate with up to 60% of employment; limited customers will be allowed to enter the dealership under very strict hygiene and social distancing conditions in line with the Regulations; and remote vehicle sales will continue for those potential customers with access to online services.

Under phase 3 (from June 8 until alert level 4 is lifted) all dealerships and used car outlets will operate with up to 100% of employment. On-site customer contact will be allowed, but kept to a minimum whilst remote vehicle sales is encouraged. Test drives can be arranged on site by appointment only, and under very strict hygiene conditions, including fully sanitised cars.

On site pick-ups and deliveries of fully sanitised cars will be allowed under strict hygiene conditions, with an option of home delivery of fully sanitised cars if possible. Car auctions for all categories will be conducted online and limited physical contact will be allowed for viewing prior to the auction under very strict hygiene conditions.

The directions further state that all vehicle dealerships must implement health and safety measures including the disinfecting of the premises, maintaining social distancing protocols, and ensuring that all staff and customers wear a cloth face mask.

Overwhelming sense of relief

Auto electricians, tyre fitment centres, auto body repairers, windscreen replacement centres and other related auto service centres are also allowed to open immediately, under the same staggered workforce levels and hygiene restrictions as car dealers.

“There is an overwhelming sense of relief that we can get back to trading,” said Mark Dommisse, chairman of the National Automobile Dealers’ Association (Nada).

“We don’t know how strong the market will be, but we have to look at the positives and get back to trading again. The fallout will still be big, but a line has been drawn in the sand. We can get the economy going.”

Dommisse said from a safety perspective, dealerships generally have low footfall and spacious facilities, ensuring effective social distancing. Appointment scheduling and access control measures, which were largely in place before the crisis, can ensure that the number of people within facilities at any given time is monitored and controlled, he said.

The lockdown has had a devastating effect on the local automotive industry, bringing manufacturing and retail industry that accounts for almost 7% of SA’s GDP to a virtual standstill.

New-vehicle sales in SA ground almost to a halt in April due to the Covid-19 hard lockdown, which forced the stoppage of all motor manufacturing and sales.

The industry total of 574 cars, bakkies and trucks recorded sold last month represented a 98.4% decline compared to April 2019.

The previous month, with the country hit by physical distancing from the middle of the month and lockdown from March 27, new-vehicle sales dropped 29.7% to 33,545 units compared to March 2019.

That leaves year-to-date new-car sales down 28.1% compared to 2019, with light-commercial vehicles (bakkies and minibuses) plummeting 38.5%, medium trucks and buses reduced by 27.3% and heavy trucks by 29.9%.

“This directive is undoubtedly good news for motorists and the motor industry alike," said George Mienie, CEO of online vehicle sales portal AutoTrader.

"Based on an AutoTrader survey, the financial well-being of a whopping 65% of vehicle-buying consumers in SA has been negatively impacted by the nationwide lockdown. Many (30% to be precise) are under pressure to replace their vehicle within the next four weeks. This is being reflected in a massive increase in online searches.

"The highest number of car searches in Level 4 period was recorded on 10 May; we recorded over 1.3 million searches on that day alone. In the last two weeks, enquiries to car dealers have risen by an astounding 69%. It is clear that motorists are desperate for the motor industry to open its doors."