LAWRENCEVILLE, Ga.—Hurricane/Tropical Storm Harvey is expected to have a big impact on the automotive industry, Black Book projects.
The storm will certainly lift new car sales, the company said.
“New vehicle SAAR (seasonally adjusted annual rate) that has been on a decline this year, will see a lift in the coming months as residents start replacing their damaged vehicles,” Black Book said.
Black Book expects the impact of the hurricane to have far-reaching effects, not only on Houston-area automotive businesses, such as dealerships and wholesale auctions, but also throughout the South and Midwest.
Black Book stated that the car rental industry will be affected first, facing a supply challenge, as thousands of residents will need to find immediate replacement of personal transportation.
“This entails not only a large quantity but the right mix of vehicles. Work trucks and service vehicles will be in extremely high demand immediately,” Black Book said.
Online buying will be a significant ingredient in the dealers’ ability to source vehicles since they don’t have a local option, noted Black Book.
“This inventory will come from many other parts of the U.S., with cars and trucks being transported to the affected regions,” Black Book said.
Early estimates are that more than 500 dealerships were affected in the Greater Houston area alone, Black Book reported. Between 500,000 to a million vehicles will have to be replaced in this area, the company projected.
“We believe there is enough new inventory in the U.S. to supply the consumers’ needs and the timing may actually be good with new car stores looking to deplete the 2017 models at model year changeover,” said Black Book.
Texas is the automotive industry’s second-largest market behind only California—14% of all pickup truck sales occur in Texas.
“We expect the market to be strong for both new and used vehicles, especially pickup trucks and SUVs,” Black Book said.