200,000 Cars Lost due to Hurricane Sandy
Assessment Just Beginning
Automakers, private dealers, new dealers, dealer groups, and transporters have just begun to assess the damage caused to their vehicle inventory and fleets by Hurricane Sandy. The storm that ravaged New York, New Jersey, and the surrounding areas not only took 100 human lives, but it also destroyed billions of dollars of property and infrastructure. The auto industry was not immune – photos and data are pouring in from all around the impacted regions showing the devastating effects of the storm, that not only cause immediate but long term effects in the industry.
As the preliminary numbers come in from the new automakers, Honda, Toyota, Nissan, and Chrysler have announced that at least 15,000 brand new cars will be scrapped. This staggering number of brand-new, never driven vehicles that will have to be used for scrap parts is unimaginable, and it’s only the beginning of Sandy’s aftermath. Those numbers don’t even bring into consideration the huge amount of personal vehicles that will be written off as a result of flood and water damage, trees collapsing, and fires.
Long term Effects
Over the long run, worldwide assembly lines of new cars will be stressed to meet the unexpected additional demands of the market, and transportation of the new vehicles to the affected areas might be slower than usual due to the infrastructure damage. Along with the tight supply of new cars, the used car industry will also be heavily affected. The supply of used cars is tight as it is, due to the huge decrease in new vehicle leases in the past four years, and the Hurricane’s effects will onlyHurricane Sandy Car Dealer Damage increase the crunch. Traditionally Canadian used car dealerships have moved south of the border to purchase cars, but maybe in light of the recent catastrophe we will say American car buyers headed to major auctions in Toronto, Ottawa, and the east coast of Canada. GM and Ford, the other two domestic carmakers that belong to the ‘big three’ have yet to provide even initial estimates on their vehicle loss.
The port of Newark in New Jersey is a major transit point for vehicles (new and used) from all over the world that are approaching the US East Coast. Along with the devastating damage caused in dealerships, parking lots, and warehouses, the port itself sustained major damage, and all the vehicles located there have been affected by the storm. Small electric carmaker Fisker Automotive from California lost 338 of it’s $103,000 vehicles at the port during the storm. 16 of those vehicles were set on fire because of electrical problems due to the saltwater entering the port yard. Along with the massive initial loss of vehicles and property, the port itself sustained damage which will inevitably cause shipping delays with new vehicles being brought to the area to replenish the stock of damaged units.