Victory for Auto Industry as Sales Deemed Essential Business

In the April 17th update to the Essential Critical Infrastructure Workers Guidance 3.0 from the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency, automotive sales have been deemed an essential business.

The designation as an essential business is a huge victory for dealerships across the nation, especially in states with tight stay-at-home orders. In the original release on March 19th, automotive service and repair facilities as well as auto parts and supply stores were considered essential, but vehicle sales were noticeably missing. In a subsequent release on March 28th, car rental and leasing facilities were added but nothing was mentioned regarding new and used vehicle sales.

The latest release update now clearly specifies that automotive sales are essential business, found in the Transportation and Logistics sector. It’s the second to last point in the document published by CISA and it states:

“…Workers critical to the manufacturing, distribution, sales, rental, leasing, repair, and maintenance of vehicles and other transportation equipment (including electric vehicle charging stations) and the supply chains that enable these operations to facilitate continuity of travel-related operations for essential workers.”

Successful Sustained Effort

The lobbying campaign to deem dealership sales essential businesses was spearheaded by several prominent trade groups including the National Automobile Dealers Association, American International Automobile Dealers Association, National Association of Minority Automobile Dealers, the Alliance for Automotive Innovation, and others. Since the March 19th CISA release, they’ve petitioned the White House to urge President Trump’s administration to clarify the guidance to include auto sales and leasing at dealership facilities.

Four weeks later into the COVID-19 shutdown, the clarification finally came. 

What It Means for Dealers

The news out of CISA is guardedly positive for the auto industry’s retail sector. It allows dealerships nationwide to open for sales and leasing business physically if their local governing bodies permit it. The decision whether a dealership can be open for sales ultimately lies with the state and local governments.

Since the federal government has assigned the title of ‘essential business’ to auto sales and leasing practices, it should be expected that states will also follow suit and allow sales in some capacity.

It could also mean that sales teams across the nation can be back to work immediately. Since the news came late in the day on Friday, April 17th, it’s assumed that Monday could be the return to work for thousands of sales professionals in many states. 

Tempered by a Weak Economy

While the breaking news from CISA is a win for dealers, it certainly won’t be business as usual. The American economy, like many countries worldwide, has taken serious damage in the wake of the coronavirus that continues to cause damage. Rather than an estimated 1.3 million new vehicles sold in April as originally predicted pre-pandemic, it’s expected that final April 2020 sales figures will be about 55 percent below target at around 597,000 units.

It’s fantastic news from the federal government, and it could be seen as a hopeful turning point for the economy. Automakers are doing their part by offering amazing incentives as low as 0% for 84 months and slashed prices for popular models.

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Car Biz Today, the official resource of the retail automotive industry.