CHICAGO U.S. light
vehicle sales could actually see a small boost this month as a
result of Hurricane Sandy.
Although many dealerships had to
shut down for up to a week as a result of power outages, many
drivers must now replace vehicles totaled by the storm, and
there has been a rapid-response effort to restock dealerships
that lost vehicles so that they can meet storm-prompted, as
well as normal seasonal, demand.
"We lost about 800 new vehicles
from our U.S. dealers," Erich Merkle, Ford Motor Co.s
chief sales analyst, told AMM. "That (figure)
doesnt include everything out there that was damaged. So
many cars were taken out of commission that we expect to see
some increase in showroom traffic and an uptick in new vehicle
sales. That could play out over the next few months."
Dearborn, Mich.-based Ford
estimates its own sales fell by 2,000 to 3,000 units last month
due to Sandy. "There was probably a little carryover into the
beginning of November," Merkle said.
People were unable to shop due
to power outages, but as things return to normal, "its
possible (month-end sales) could offset early weakness," he
"I suspect well see higher
sales due to the storm and relief activity over the next couple
months," according to James R. Cain, Detroit-based General
Motors Co.s manager for financial news. Although he
couldnt provide a firm estimate, "some (sales) will be
the return of customers who deferred purchases, some will be
replacing vehicles and some will be related to recovery-driven
Torrance, Calif.-based Toyota
Motor Sales USA Inc. lost 2,773 vehicles at East Coast ports
that were a total loss and had to be scrapped, environmental
communications manager Jana Hartline told AMM.
"Dealerships had a total loss of 835 units (for) a total of
3,608 (units)," she said.
Although some Toyota dealerships
were closed due to power outages, they were operating again
within a week and dealerships across the United States shipped
their vehicles east to replace damaged inventories, Hartline
As for imports, "we actually
received our first (post-storm) shipment at the Port of Newark
(N.J.) on Nov. 9. That was an amazing turnaround on the part of
the port," which had been flooded. As a result, "our (East
Coast) inventory looks really good," she said, adding that she
hopes that November sales figures will reflect a current
increase in showroom traffic.
Ford, GM and Toyota, among
others, are offering vehicle purchase incentives to storm
victims in the form of cash back, deferred payments and other
special financing terms.
Most incentive programs,
including GMs, run through Jan. 2, "so early in the new
year, well have a firm handle on replacement demand,"
Automakers expectations of
a demand uptick in the Northeast have historical support: In
the aftermath of Hurricane Katrina, which made landfall in late
August 2005 in Louisiana, the state saw a significant boost in
new vehicle sales, the Louisiana Automobile Dealers Association
Louisiana dealers sold 231,554
vehicles in the January-to-September 2006 period, up 26.3
percent from 183,371 vehicles in the same year-earlier
"Sales were up considerably, for
even more than a year," association president Bob Israel said.
"It was 100 percent replacement vehicles" due to the storm.