In June, I wrote about the impact of the coronavirus pandemic on vehicle listings sites — namely, how dealerships’ pullback on marketing spending affected those marketplace companies’ bottom lines.
Some dealers suspended or canceled their subscriptions to online grocery shopping sites such as Cars.com, CarGurus and TrueCar starting in March, when some states began closing the showrooms. The monetary record of the pandemic was not yet transparent at the time. The companies reported that the decrease in the number of distributors who subscribed to their directory continued in the quarter.
We have a broader concept of having an effect in the current quarter now that public charting sites are starting to publish profits.
Cars.com was the first to release its quarterly monetary effects last week. CarGurus and TrueCar will remain this week.
From April to June, Cars.com lost 905 broker consumers compared to the first quarter, reducing its number to 18,033 franchised and used retail outlets. That’s the lowest figure since at least the 2019 quarter, the company reported, adding that the decrease is basically due to cancellations and sales of its product in the online marketplace.
CEO Alex Vetter told analysts at a conference call last week that cancellation rates peaked in May, while retention rates advanced in the quarter and July.
Dealer discounts filed in April, May and June ended July 1, Vetter said, “and in July, withholding is equal to or higher than the rates recorded at the time of 2019 and 2020 before the pandemic.”
Distributors have been able to resume sales operations, and some have resumed advertising expenses that had now suspended the economy has reopened.
But it’s too early to say whether the trend will continue for the rest of the year. As Cars.com said last week, a resurgence of COVID-19 instances and uncertainty about the economy make it difficult to wait if dealers will take a break from marketing again.
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