After Sandy, swollen stocks, soaked cars
Superstorm Sandy caused automakers and dealers to pile up the largest inventory of unsold vehicles in 46 months. But because of Sandy, many of them will never be sold.
U.S. dealers and carmakers began November with 3 million vehicles in stock, the most at the start of any month since Jan. 1, 2009, and 243,200 more than on Oct. 1. Sandy effectively halted auto sales in the Northeast during the last three days of October.
The industry's supply went from 58 days on Oct. 1 to 71 days on Nov. 1. But the inventory includes new vehicles damaged by wind-blown debris or flooding, including dealer stock in 21 states.
Toyota, Nissan, Honda and Chrysler lost about 15,000 new vehicles combined between port and dealer stock, their tallies show. The full industry's loss will rise as other automakers add up their damages.
General Motors sales boss Kurt McNeil said GM is working closely with affected dealers, but he said it's complicated because each dealer must work with its insurer. "If cars are scrapped, the [legal] process is followed, titles removed and VIN plates removed," he said. "It takes time."
Mazda said its situation could have been worse. "We lost about 1,200 cars in the storm," said Mazda spokeswoman Halie Schmidt. "But we had two ships unload in the days following so we are not expecting any particular issues on availability."
Once the industry finishes writing off unsalvageable models, the remaining inventory is likely to be in demand, especially near New Jersey and New York where the storm came ashore. Larry Dixon, an analyst with the National Automobile Dealers Association, estimates that private owners will need to replace up to 200,000 vehicles lost to Sandy. He says replacement demand will probably peak in December as insurers issue reimbursement checks.
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