Governor loosens Michigan auto dealership shutdown to allow online sales

Detroit — Michigan auto dealerships will be allowed to make online sales during the COVID-19 pandemic, after Gov. Gretchen Whitmer issued a new executive order Thursday declaring that dealership employees are now considered critical workers.

The new order, which extends the state's stay-at-home order to April 30 from the original date of April 13, accepts that vehicle sales and leasing are essential activities and can be conducted remotely and electronically. Although they still cannot open their showrooms for in-person sales, it's good news for Michigan dealerships that went dark with the original March 24 order.

"We are really excited to be able to help people who are in critical need of a car," said Doug North, owner of North Brothers Ford in Westland. "We are hopeful that maybe this will give us an opportunity for the rest of April to certainly sell a few more cars and to service a few more."

He said one Ohio dealership told him they had sold 15 vehicles to Michigan customers who had been unable to buy a vehicle in their own state over the last few weeks.

Michigan last week opened up a narrow window for sales, allowing dealers to perform sales for first-responders and other essential workers in emergency situations.

The new order Thursday specifically states that workers are deemed essential "at motor vehicle dealerships who are necessary to facilitate remote and electronic sales or leases, or to deliver motor vehicles to customers, provided that showrooms remain closed to in-person traffic."

Michigan had been one of only four states — including Hawaii, Pennsylvania, and Kentucky — to ban all auto sales. Washington state dropped off the list last week when it OK'd digital sales, according to J.D. Power.

Overall, 24 states (accounting for 44% of US sales in 2019) allow for dealership sales operations to remain open. Another 23 states have restricted sales to online. 

In the first week of April, sales were off 59% across the country, with Michigan flat-lining at a near 100% decline, J.D. Power said.

Automakers across the U.S. already started to implement changes in their business last month as the contagion spread. They've been doing extra sanitizing of vehicles, covering seats and steering wheels, dropping off vehicles for test drives and having customers complete paperwork over the web before delivering them their new vehicle.

"This will impact every part of how we do business going forward," North said.

Meanwhile, it's unclear when auto production will restart to help keep stock on dealer lots. Most auto factories in North America are shut down. But inventory remained strong at the beginning of April with the average days' supply number for the industry at 95 days, according to Edmunds.com. That's a 26-day gain from March and is the highest it has been since February 2009 during the Great Recession.

khall@detroitnews.com

Twitter: @bykaleahall

hpayne@detroitnews.com

Twitter:@henryepayne