Sales get boost from hurricanes

DETROIT: Major automakers on Tuesday posted higher US new vehicle sales in September as consumers in hurricane-hit parts of the country replaced flood-damaged cars, extending a rally in their shares that began when Hurricane Harvey hit southeast Texas in late August.

Analysts and industry consultants had predicted hurricanes Harvey and Irma would provide automakers with their first monthly gains in 2017. Sales had been weak after a strong run since 2010 that culminated in record sales of 17.55 million units in 2016.

But others warned high inventory levels and record consumer discounts remained a concern moving forward.

The seasonally adjusted annualised rate of US car and light truck sales in September rose to 18.57 million units from 17.72 million units a year earlier, according to Autodata Corp, which tracks industry sales.

While US sales rose beyond the storm zones, according to automakers and dealers, much of the September gains came after Hurricane Harvey hit Texas. Replacing cars during the recovery in southeast Texas and Florida will boost US new and used auto sales through at least November, according to industry consultants.

“While the hurricane recovery drove sales, this will be a shortlived party,” said Michelle Krebs, executive analyst for online sales site Autotrader.

Up to 500,000 cars were damaged or destroyed during Harvey and another 200,000 cars during Irma, according to industry estimates.

Industrywide, new car sales in the Houston area, the fourth-most populous US city, soared 109% in the three weeks after Hurricane Harvey compared with the three weeks before the storm, according to car shopping website Edmunds.