BIRCHWOOD AUTOMOTIVE GROUP
DRIVEN TO SUCCEED Auto dealerships rebound after early dent in sales BY SHERRY KANIUGA
The three busiest months for the automotive sales industry in Manitoba are typically March, April and May. This year was on track to see business as usual — until the pandemic hit. Eight months later, auto sales were still down about 17% for the year overall, but dealerships had picked themselves up and were moving forward, with sales in October climbing back to nearly the same level they were at last fall. “Sales just fell right off the cliff in the spring, and we’ll never catch all that up, but they’ve rebounded really well,” says Steve Chipman, President and CEO of Birchwood Automotive Group. Birchwood has 22 dealerships across southern Manitoba and Saskatchewan. Like all other dealerships in the province, and across North America, they are faced with the same issues, Chipman says. But while his company was forced to lay off nearly half of its 1,100 employees in the spring, it was able to hire most of them back — and the industry saw a surge in demand for both new and used vehicles, especially in the luxury market. “The economy has swung back up. People are saving money because they don’t have as much to spend it on, and interest rates are crazy low,” Chipman says. The biggest issue now is inventory. Manufacturers — which also had to shut down in the spring — simply can’t keep up with the demand, leaving buyers no choice but to be patient. “Everybody is in short supply, and that takes a while to build back up,” Chipman explains. “If you come into one of our dealerships and say, ‘I want a red truck,’ we may not have a red one for you, but we can get one if you’re willing to wait.” While the pandemic-driven move toward working
from home saves a lot of daily wear and tear on vehicles — meaning commuters can keep them longer — there are many people who simply find that having a car during the pandemic is a new need. “We’ve seen some people come in and say, ‘I don’t want to take public transit anymore,’ or ‘I don’t want my wife or kids to have to take the bus.’ Car pools are probably happening less. Maybe they want to travel but not take an airplane, so they plan to drive. Or they just bought a cottage and need a reliable vehicle to get there,” Chipman says. While more people are buying vehicles, many still want to keep contact to a minimum, so they are spending more time researching and doing their initial shopping online. The number of shoppers taking test drives is down, and buyers are getting familiar with what they want before they ever see the vehicle in a physical showroom. Dealerships are operating more online for other reasons too, Chipman says. “We’re doing more advertising through social media, trying to develop better lines of communication, especially with younger people. And we’re working on the potential for more buying transactions to be done online — more and more people have confidence in the process of buying a vehicle online, or at least doing a bigger portion of the transaction that way.” Chipman sees other benefits for Birchwood Automotive Group — and likely across the industry — despite the complications the pandemic has presented. “Going into this, I told our team leaders, ‘This is going to hurt, it’s going to be difficult, and we’re going to be challenged — but whenever this does end, we will be a better company because we will have learned how to adapt,’ ” he says. “When you work hard together through a problem, come up with some ideas, focus, and meet a challenge, you’re always a better team and a better company.” ■
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