2019.08.25 Aggreko

The Effects of Hurricanes on the Auto Industry

Aggreko

When Hurricane Harvey tore through the southern states in 2017, no one was thinking about the auto industry. But in the aftermath of the superstorm, it was quickly discovered that the industry had taken a battering - so much so, in fact, that it’s though Harvey destroyed more vehicles than any other natural disaster in US history.

Predictions suggested that around one million vehicles were ruined along the Texas Gulf, with one in seven cars in the Houston area destroyed beyond repair. Many cars and trucks that weren’t completely written off in the hurricane came out the other side with severe electrical damage or other faults, pushing the number of unusable vehicles up even higher.

It’s not just Hurricane Harvey that’s affected the auto industry in the past, though.

Sandy is thought to have ruined around 250,000 vehicles when it struck New York in 2012, and Katrina destroyed a further 200,000 in 2005. As well as individually owned cars, vehicles stored in dealerships were also wiped out, causing massive stress on the industry as a whole. On top of this, residents of the southern states scrambled to hire cars in the aftermath of Harvey, but again many of the vehicles were un-driveable and there was a very limited supply.

How Hurricanes Affect Car Sales

During Hurricane Harvey, predictions show that around 500 car dealerships in Houston were affected by the treacherous weather conditions. Further estimates claimed that 500,000 to one million vehicles needed to be replaced.

For the duration of Harvey, car sales dwindled to almost nothing as residents focused their energy elsewhere. But, once auto insurance checks started arriving, the number of sales quickly ramped up - a relief for the auto industry who had been predicted a lucrative August thanks to an extra day of selling. Throughout September and October, car sales continued to rise as people replaced their ruined vehicles.

It’s thought, overall, that automakers sold tens of thousands of fewer vehicles than expected because of Harvey, with new vehicle sales declining 1.9% year-over-year.

The strong winds and battering rains of hurricanes obviously have an impact on many industries, but the auto industry is perhaps one of the worst hit by freak weather. Ensuring your dealership or factory is prepared for inclement conditions can have a major impact on sales in the aftermath of a storm. Of course, the damage caused is always an unknown, but planning ahead and making sure your facilities are up to scratch and processes are in place can keep things as normal as possible after a hurricane.