As the city of Houston and surrounding regions continue to cope with the devastation caused by Hurricane Harvey, I wanted to provide you with several updates and insight from Black Book, which is actively tracking any impact on the region’s automotive industry.
Black Book expects the impact of the hurricane to have far-reaching effects, not only on Houston-area automotive businesses, such as dealerships and wholesale auctions, but also throughout the South and Midwest. In fact, the storm continues to actively affect parts of Louisiana, moving northeast toward Tennessee:
- The rental industry will be affected first with the supply challenge, as thousands of residents will need to find immediate replacement of personal transportation. This entails not only a large quantity but the right mix of vehicles. Work trucks and service vehicles will be in extremely high demand immediately.
- Online buying will be a significant ingredient in the dealers’ ability to source vehicles since they don’t have a local option. This inventory will come from many other parts of the U.S., with cars and trucks being transported to the affected regions.
- Early estimates are that more than 500 dealerships were affected in the Greater Houston area alone.
- Somewhere between 500,000 to a million vehicles will have to be replaced in this area.
- We believe there is enough new inventory in the U.S. to supply the consumers’ needs and the timing may actually be good with new car stores looking to deplete the 2017 models at model year changeover. New vehicle SAAR that has been on a decline this year, will see a lift in the coming months as residents start replacing their damaged vehicles.
- Texas is the industry’s 2nd largest market behind only California. 14% of all pickup truck sales occur in Texas. We expect the market to be strong for both new and used vehicles, especially pickup trucks and SUVs.
About Black Book
Black Book® is best known in the automotive industry for providing timely, independent and accurate vehicle pricing information, and is available to industry-qualified users through online subscription products, mobile applications and licensing agreements. A leading provider since 1955, Black Book has continuously evolved to ensure that it achieves its goal of delivering mission-critical information to its customers, along with the insight necessary to successfully buy, sell, and lend. Black Book data is published daily by National Auto Research, a division of Hearst Business media, and the company maintains offices in Georgia, Florida, and Maryland as well as the Canadian Black Book in Toronto. For more information, please visit BlackBook.com or call 800.554.1026.