March 23, 2023

Car and Truck Sales Failed to Keep Pace in October

Major automakers said Thursday that vehicle sales in October declined in the month’s final days, as the storm forced hundreds of dealerships to close and consumers to delay car purchases in New York, New Jersey and other affected states.

Until the storm arrived, the pace of sales in October had been running slightly behind that of the rest of the year. Sales overall rose just 6.9 percent to about 1.09 million vehicles during October, compared with a 14.5 percent gain over the first nine months of the year, according to the research firm Autodata.

Analysts had been predicting an annual sales rate of about 14.7 million vehicles for October, but now say the rate fell at least 300,000 short of that.

Still, most car companies reported increases for the entire month, an indication that any interruption of the industry’s recovery was probably only temporary.

Storm devastation and disruption on the East Coast had an impact on hundreds of dealerships and brought showroom traffic to a halt even in areas spared the most severe damage.

Sitting in his office off an empty sales floor, Frank Lupo bemoaned the dearth of customers at his Acura dealership in Montclair, N.J. “Horrible,” Mr. Lupo said in assessing his business on Wednesday. “No customers today. Not one.”

Most of his calls that day came from people already trying to replace vehicles flooded by the hurricane. But Mr. Lupo is not expecting sales of replacement vehicles to begin any time soon, as insurers sort out claims and customers affected by the storm focus on more immediate needs.

“The last thing a person wants to do is buy a car,” he said. “They need to worry about their power, about their family.”

All the big automakers are trying to tally how many sales were lost in the storm, and when those customers will return.

Sales at General Motors, the nation’s largest automaker, rose 4.7 percent during October to 195,000 vehicles. A G.M. executive said the company was still calculating the impact of the hurricane on sales, but that its top priority now was assisting dealers shut by the storm.

“There’s no question that it had an impact,” said Kurt McNeil, G.M.’s head of United States sales. “A large number of vehicles were damaged, dealerships are underwater, there’s no power. There are some real horror stories out there.”

Mr. McNeil said that consumers usually returned to the marketplace within a month after a natural disaster. But he said the recovery from the storm could take longer because of the dense population areas affected by the storm.

“Probably half of our dealerships in the state of New Jersey are still without power,” he said.

G.M.’s two Detroit rivals, the Ford Motor Company and Chrysler, reported mixed results for the month.

Ford said its sales edged up 0.4 percent during the month to 168,000 vehicles, while Chrysler reported a 10 percent increase to 126,000 vehicles.

Both companies reported big gains in the sales of their smallest, most fuel-efficient passenger cars.

Among other automakers, Toyota and Honda continued their rebound from last year’s supply disruptions caused by the earthquake and tsunami in Japan.

Toyota said its sales in October increased 15.8 percent to 155,000 vehicles, and Honda reported an 8.8 percent gain to 106,000. Nissan’s sales fell 3.2 percent to 79,000.

The German carmaker Volkswagen kept up its healthy sales pace in October, reporting a 20.4 percent increase in sales of VW and Audi models to 46,000 vehicles. Estimates varied on how many vehicle sales were lost because of the storm, which affected a geographic area that accounts for from 20 to 25 percent of national sales. The car research Web site estimated a loss of about 30,000 sales in the final days of the month, while Ford said it could be as low as 20,000.

The larger question facing the industry is how long it will take for shuttered dealerships to reopen and for consumers in the affected areas to resume shopping for new models.

“In some areas it’s going to take longer than a month,” said Mr. McNeil of G.M.

Analysts said the relative affluence of the New York metropolitan area should get the industry back on track sooner than it did in the Gulf Coast region after Hurricane Katrina in 2005.

“Katrina affected areas where the income level was lower and the damage was almost irreparable in some places,” said Jesse Toprak, chief market analyst at the auto research site

The recovery in storm-damaged areas should begin quickly once power is restored and infrastructure is repaired, he said, but “it’s going to be a very slow November for at least two weeks in the impacted areas.”

An untold number of vehicles were damaged by flooding during the storm.

The president of the Greater New York Automobile Dealers Association, Mark Schienberg, said the number of flooded cars and trucks could reach into the tens of thousands.

The association represents 425 new-car dealerships in the state, and his offices tried to contact more than 100 stores on Wednesday. Of those, 60 percent did not answer the phone.

“Those we did speak with had flooding or wind damage or other damage to property,” said Mr. Schienberg, who owns domestic and import dealerships in the state. “I’m so amazed by the amount of vehicle damage.”

Mr. Toprak said that consumers might not begin replacing damaged vehicles in large numbers until December, particularly if insurance payments are delayed because of the volume of hurricane-related claims.

When they do come back to the market, consumers will most likely continue the buying trends that have made auto sales a rare bright spot in the overall American economy.

Small car sales are surging at both domestic and import manufacturers. Signs also suggest that pickup sales will accelerate along with housing starts. Mr. McNeil of G.M. said he expected a surge of interest in pickups in the final months of the year.

“Housing has been the stumbling block in the national recovery and the auto recovery,” he said. “Now it looks like we are at or near an inflection point.”

Bill Vlasic reported from Detroit. Andrew Martin contributed reporting from Montclair, N.J., andMary M. Chapman contributed from Detroit.

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