CRA Business News – Canada
Toronto, Ontario — CarGurus says the coronavirus is encouraging people to consider buying vehicles online.
The Canadian digital car sales business has released findings from its COVID-19 Sentiment Study.
According to its report, researchers found that the number of people interested in buying businesses online had more than doubled in Canada. Prior to the report, the company says 31 percent of would-be buyers were willing to consider shopping online. More recent numbers show that 62 percent of would-be buyers had expressed a desire to buy online.
While the percentage may have doubled, the total number appears to reflect the percentage of people who are still interested in buying vehicles. Six percent of those considered would-be buyers prior to the outbreak were found to have put their plans on hold.
Since the release of the report, the business’s stock has trended upward. In early April, the stock sat at about $16-U.S.-per-share. It is not up to near $23-U.S.-per-share. In January, the company was trading at about $38-U.S.-per-share, though its record-high was at $55.69 U.S. in September of 2018.
The Boyd Group will sell new stocks, with an estimated value of $200 million, next month. The money raised by the sale is expected to be used for acquisitions during the post-pandemic period.
In late March, Boyd told investors it already had about $575 million.
While the company, which owns Gerber Collision and Assured Automotive, froze all merger and acquisition activities in March, the cash-raising sale indicates that the company intends to reassert itself when the social isolation era comes to an end.
“We believe there will be many opportunities that come from this crisis, both internal and external, and our strong balance sheet, which will be further strengthened by this financing, will put us in the best possible position to come out of this crisis as a stronger company,” CEO Tim O’Day.
The Boyd Group’s share prices are now trading at about $193, up from a 2020 low of about $130 in March. In January, prior to the coronavirus pandemic, its stocks traded above $220.
While the Boyd Group’s stock sale may indicate that its corporate team will be busy during the post-Coronavirus period, its collision and glass facilities may not see as much of an increase in their workloads.
According to the company, the business has been down to about 60 percent of normal levels since social isolation policies started to affect North Americans in mid-March. This figure appears to be roughly in line with the information provided by other auto repair sector businesses that have remained in operation through the pandemic.
Unfortunately for business owners hoping for an influx of vehicles to appear as social isolation measures come to an end, it does not appear that many drivers are keeping damaged vehicles away from repair shops, holding out for a safer time to get them repaired.
Research firm INRIX has released information on driver behaviour that shows drivers have cut down the amount of distance travelled by vehicle by between 38-48 percent as a result of the Coronavirus. With the decline in mileage roughly even with the decrease in auto repair business, a post-repair bumper crop of damaged vehicles seems unlikely.
Credit to CollisionRepairmag.