Hurricane Harvey likely destroyed several hundred thousand, according to several early reports.
Hurricane Harvey and its catastrophic aftermath likely destroyed more vehicles than any other natural disaster in U. S. history, according to several early reports.
The calamity likely ruined several hundred thousand vehicles along the Texas Gulf Coast, including more than 1 in 7 cars in the Houston area alone, according to Evercore ISI analysts.
U. S. auto sales suffered a temporary setback in late August as flood waters shut down hundreds of Texas dealerships. But sales are likely to get a boost in the fall as Texans scramble for transportation and spend insurance checks to replace their cars, sport-utility vehicles and pickup trucks.
Harvey destroyed about 300,000 to 500,000 vehicles owned by individuals, Cox Automotive chief economist Jonathan Smoke estimated. Insurance is expected to cover a large portion of those losses.
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Smoke’s projections were based on a comparison of the Houston-area storm damage and vehicle ownership to scrappage rates and insurance claims from 2012’s Superstorm Sandy in the New York region and 2005’s Hurricane Katrina in the New Orleans area.
Vehicle ownership rates are higher in Houston, which has about 1.8 vehicles per household, than in New Orleans during Katrina at 1.6 and in New York during Sandy at 1.3.
Sandy is believed to have destroyed about 250,000, while Katrina ruined about 200,000, according to Cox Automotive. Other estimates peg Katrina’s destruction at closer to half a million, but those figures include storms that occurred later, including Hurricane Rita and Hurricane Wilma.
„It makes sense that the total vehicles damaged will be more severe than we saw in either of those cases, “ Smoke said, adding that 300,000 is „a fairly conservative estimate“ and that 500,000 is „clearly plausible.“
Another 366,000 new vehicles stored on dealership lots were probably „affected, “ with about 150,000 to 200,000 of those units located in the hardest-hit areas, Edmunds analyst Jessica Caldwell estimated.
Automotive data source Black Book said more than 500 dealerships in the Houston area were affected. That included all 17 stores owned by AutoNation, the largest dealership network in the U. S., which reopened its locations Thursday.
Black Book pegged the total vehicles that must be replaced at 500,000 to 1 million.
For victims of the disaster, auto insurance checks won’t take long to start rolling in. IHS Markit auto analyst Chris Hopson said auto sales in the region will likely start accelerating by late September or early October.
But in the short term, U. S. auto sales will take a hit. Automakers likely sold tens of thousands fewer vehicles than expected because of the storm, according to several estimates. The Harvey region represents about 30% to 40% of Texas sales, which account for up to 9% of U. S. sales, according to Barclays.
„We have a whole week in August where we’re not going to see sales in the Houston area, “ Hopson said.
But the disaster will likely boost auto sales in the fall, with a particular increase in pickup trucks and SUVs because Houston is one of the nation’s biggest buyers of large vehicles.
After Sandy, which occurred in late October, November sales in the New York area spiked by nearly 50% over the previous month, Smoke said.
„We think most of this will come pretty quickly, “ he said.
Pickups like General Motors‘ Chevrolet Silverado, Ford’s F-series and Fiat Chrysler’s Ram are among the most likely models to experience sales increases, Smoke said.
For August, analysts had expected the industry’s first year-over-year sales increase of 2017. But Kelley Blue Book has lowered its outlook to a projected 0.5% nationwide decrease to 1.5 million units.
