Harvey will test industry resolve and skills in adjusting to a changing marketplace.
Automakers have handled 2017's modest 2.7 percent falloff from 2016's record sales pretty well so far. Most have adapted to slower demand and are making rational strategic and tactical adjustments.
But Hurricane Harvey is a wild card.
It might be an inflection point for a steeper rate of declining sales. Or not. The fallout from Harvey may further separate brand winners and losers. Or not. We don't know yet.
What Harvey certainly does is ratchet up the uncertainties and unknowns in the U.S. marketplace.
Even where we can see the wind has changed direction, the extent is still pretty hazy.
Let's compare how Harvey affected the flow of information for two Texas auto retailers on Monday.
Gillman Honda Houston was closed because employees couldn't get to work, so sales manager Dana Laperle was at home on his mobile phone, fielding operator-rerouted calls to the store's general number. He knew his vehicle inventory had been moved to higher ground, that the store hadn't yet flooded and that the gates were open to accept towed and disabled vehicles. But he didn't know where all the store's employees were. Actually, he knew exactly where two flooded-out workers were -- staying at his house.
"We're mostly trying to make sure our employees and their families are safe and have a place to stay," he said.
Six hundred miles northwest in Amarillo, General Manager Mike Good of Street Toyota was reviewing documentation on the 19 new Toyotas his store sold Saturday as Harvey was tearing up the Texas Gulf Coast. A former resident of the Houston area, Good's heart was elsewhere, but he already recognized that Gulf States Toyota would make restocking depleted dealerships in southeastern Texas and Louisiana a priority.
"We'll get fewer of some popular models the next few months," he said. "The business need is there."
Both executives wanted more, better information, but proximity to Harvey dictated their priorities. Laperle needed immediate, tactical facts. Were employees safe, infrastructure and stocks intact, and when and how could the store reopen? Good wanted strategic-level info: how demand will change, what new product mix he'll get, where and how to resupply Street Toyota's growing used-vehicle stocks.
To a greater or lesser extent, the variables unleashed by Harvey have complicated the near-term information needs of automakers, suppliers, lenders and dealers throughout the industry. Almost a week after Harvey made landfall, all the experts and relief providers simply don't have a handle on the extent of damage. How many homes are still underwater? How many vehicles were lost? When can businesses fully reopen?
Mitchell Phillips, the global data director for Urban Science, has tracked the effect hurricanes have on auto sales for 30 years. But Harvey was unique in geographic size and the extent of damage it left behind. Phillips expects a typical auto-sales recovery arc: an awful first month, a spike in replacement-related sales in the second and third months, and demand that tapers off and normalizes after 12 to 18 months.
But automakers must adjust allocations and dealerships must reopen and restock -- quickly. Says Phillips: "Brands that can't meet early demand miss the recovery."
You may email Jesse Snyder at email@example.com.