How Hurricane Sandy's Aftermath Will Affect The Auto Industry
New-car sales may dip in short term, but storm victims could add to year's strong sales numbers
In the short term, the superstorm is expected to hurt October sales figures, as dealerships across the Eastern Seaboard missed several days of sales. But in the months ahead, analysts expect the storm to boost an already-burgeoning industry as Sandy's victims replace damaged vehicles.
"There was definitely a loss of sales over the last couple of days and this month, sales will be lower than the would have been otherwise," said Tracy Handler, principal analyst for IHS Automotive. "Over the next 30 days, we'll see some lower sales for a bit, but then we expect we'll come back."
The storm decimated a region that accounts for approximately 20 percent of all U.S. car sales. Early estimates say the halt in sales could cost automakers as many as 100,000 units in October figures, but delayed purchases could beef up November numbers instead.
The number of damaged or destroyed cars is hard to pinpoint only two days after Sandy hit. Ford spokesperson Erich Merkle said it was too early to assess Sandy's impact on the company's October numbers or forecast for the year. A spokesperson for insurance giant State Farm said that 900 auto-related claims had been filed by early Wednesday afternoon, but that's only the beginning.
"We're just ramping up," she said.
When Hurricane Katrina hit the Gulf Coast in 2005, approximately 640,000 vehicles were lost. Hurricane Sandy, hitting a much more population-dense region, is expected to have a far more reaching effect.
New car sales were initially expected to rise approximately 12 percent in October, according to a TrueCar.com projection. The Seasonally Adjusted Annual Rate (SAAR) of sales was expected to top 14.9 million units this year, the highest industry sales figures since 2007.
While October's projections may dwindle, the possibility of so many new car shoppers unexpectedly entering the market could push the SAAR above 15 million.
Luxury brands could potentially see the biggest temporary dips in their numbers – and potentially the biggest longer-term rewards. The New York, Philadelphia and Washington D.C. markets account for 25.4 percent of all Acura sales, 23.6 percent of Mercedes-Benz sales and 23.2 percent of BMW sales, according to an Edmunds analysis of Polk car registration data.
Popular car brands in each market could also see numbers affected. Honda accounts for 14.2 percent of all New York car registrations, Ford claims 14.3 percent of the Philadelphia market and Toyota holds 16.1 percent of the new-car market in the nation's capital.
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