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Light vehicle sales may log post-Sandy spurt

Keywords: Tags  automotive sales, General Motors, Ford Motor, Toyota Motor Sales, Erich Merkle, Jim Cain, Jana Hartline, Hurricane Sandy Port of Newark


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) doesn’t 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, "it’s possible (month-end sales) could offset early weakness," he added.

"I suspect we’ll 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 couldn’t 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 economic activity."

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 said.

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 GM’s, run through Jan. 2, "so early in the new year, we’ll have a firm handle on replacement demand," Cain said.

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 said.

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 period.

"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.


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