Local dealers expect to see car sales soar
Last month’s figures were off, but increases are likely in the next round of numbers
New-vehicle sales in the Houston area fell substantially in August as Hurricane Harvey swept the region, but local dealers anticipate a surge in demand to replace flood-ravaged cars and trucks.
NEW-vehicle sales in the Houston area fell substantially in August as Hurricane Harvey swept the region, but local dealers anticipate a surge in demand to replace floodravaged cars and trucks.
Retail sales in the metro area reached about 14,000 vehicles in August, a 44 percent decline from the same month last year, according to data from the TexAuto Facts Report, published by Sugar Land-based InfoNation. But the firm expects September and October sales to jump in a brief reprieve from a slump that has plagued area dealers for more than a year.
The storm stranded thousands of drivers and left insurance companies scrambling to process claims. InfoNation estimated the storm destroyed about 300,000 cars and trucks worth $2.4 billion. Other firms have pegged the number of ruined vehicles at 500,000.
Buying activity already increased during the first two weeks of September, In-
foNation owner Steve McDowell said, adding that he expects it to accelerate through October as insurers issue claims checks.
“It’s really something,” he said. “I think we will have both new and used sales increasing as people get sorted out.”
The replacement rush could lessen the pinch of a monthslong decline in auto sales in the wake of the oil bust. Year-to-date sales have fallen 13 percent.
Some segments of the market have improved despite the declines. Truck and SUV sales claimed 68.6 percent of the market, up for the third straight month.
The overall increase in demand isn’t likely to compensate for sluggish sales earlier this year, McDowell said, but it will provide an end-of-the-year boost as dealers work to clear older models off their lots.
“I think it’s going to help some,” McDowell said. “But I don’t think it’ll come out higher than it otherwise would have.”
Most major dealerships in the area reported minimal inventory damage after the storm, and some have already placed orders for hundreds of vehicles in anticipation of a boost.
Houston-based Group 1 Automotive, the city’s largest dealership chain, reported about $15 million in damages, a total that includes disaster pay and financial support for employees. The company minimized inventory loss by moving vehicles to higher ground, and it managed to reopen all of its stores just days after the rainfall stopped.
“Beyond helping our employees, we are also moving quickly to get our stores fully online to support the community’s needs for replacement vehicles,” president and CEO Earl Hesterberg said in a statement.
Steven Wolf, president of the Houston Automobile Dealers Association, estimated that September sales at his three area dealerships doubled this month compared with the same period last year, challenging his employees to keep up. He expects the rush to last for another six weeks.
“We’re not geared up for this kind of demand,” he said. “But I’m sure in a few months, we’ll be wishing it was like this again.”