Will Sandy Send Auto Sales Higher?
Even with Hurricane Sandy, which cut short vehicle sales on the East Coast in October, automakers largely posted increases last month.
Volkswagen sales were up 22% last month ― the automaker’s best October in nearly 40 years ― even though a quarter of its U.S. dealerships were affected by the storm. Toyota’s sales rose 16%, while Chrysler sales were up 10%.
General Motors sales increased 5%, to 195,764 ― the best October since 2007. About half of GM’s New Jersey dealerships are still closed because of Sandy, as of today.
All told, analysts estimate that sales were reduced by 20,000 to 30,000 units because of the hurricane. But that’s just the beginning. Think of all the consumers who need to replace flood-damaged vehicles. Or of all the fleets that have been destroyed.
I wonder what will happen to used-car pricing, which was just starting to soften. With all the flooded cars out of the auction lanes, will pricing spike again? Might we reach new records?
Other questions I’ve been thinking about:
- How will lenders deal with the remarketing challenges posed by auctions shuttered by the storm? What changes will they have to make?
- What incentives might we see to entice buyers? How successful will lenders be at retaining existing customers?
- Will potential car buyers look to spend less on their vehicle purchases if they’re worried about other expenses related to repairing storm damage?
- How much of an indicator for the potential path of recovery are previous storms, like Hurricane Katrina?
Lots of questions, but not many answers right now.
