The auto industry hasn’t been doing so well lately, with new car sales in decline for the first time in nearly a decade. This comes after a record-breaking sales period over the last few years (with the last year having 17.8 million car sales). The last thing it needed was Hurricane Harvey.
Hurricane Harvey isn’t being gentle on Texas, with the state asking Congress for $5.95 billion in relief funds, and the same can be said about its impact on the auto industry in that area. The hurricane has devasted homes and businesses along the coastline of Texas, and even up into the Houston area, and a lot of those businesses are auto dealers.
According to estimates, as many a 500,000 vehicles have been destroyed thus far by the storm, and hundreds of auto dealerships have had to shut down. Texas, being the auto industries second-largest market in the U.S. after California, has effectively closed down for the time being. And with major portions of the state’s southeast region under water and no relief in sight, it doesn’t look good.
Some auto manufacturers have had to shut down all operations, as well. For instance, Toyota Motor Manufacturing in San Antonio, 200 miles west of Houston, briefly stopped their production.
“We stopped production on Saturday but resumed from the first shift (Monday) morning,” said Amanda Roark, a Toyota spokeswoman. “No damage has been reported and our other manufacturing facilities remain unaffected.”
Dealerships, however, might have to wait weeks just to know the full extent of the damages that they’ve suffered to properties and inventory. Given that $98 billion in annual revenue comes from interest on auto financing, and that so much inventory has been destroyed, the losses could be in the hundreds of millions.
All hope isn’t lost for Texas dealerships, experts believe. A rebound can be expected in the last months of the year as motorists replace their damaged or destroyed cars. Bill Wolters, president of the Texas Automobile Dealers Association, believes that a majority of the dealerships in Houston will be able to emerge relatively unscathed.
“We think dealers may be able to ride this out and open back up,” he said, “but this is a tragedy of epic proportions, especially on the personal side.”