Wow: Sandy Might Send More Than 250,000 Cars to Scrap Heap


car-sandySuperstorm Sandy may consign as many as a quarter of a million new and used cars and trucks to the scrap heap, a loss that could eventually lead to a spike in new auto sales, automakers and dealers said.

So far, automakers have reported that some 16,000 brand new vehicles will have to be scrapped due to the killer storm that flooded coastal areas in New Jersey and New York. Many of them were stored at the port of Newark when Sandy hit.

That figure may grow once the two biggest automakers by U.S. sales, General Motors Co and Ford Motor Co, announce how many vehicles they lost due to Sandy. By Wednesday, nine days after Sandy made landfall in New Jersey, neither GM nor Ford gave estimates of vehicles that are a total loss.

Sandy, one of the largest storms to strike the United States, left more than 8 million homes and businesses in the Northeast without electricity. All but a handful of New Jersey and New York auto dealerships were back in operation by Wednesday, some operating on generator power.

At least 121 people were killed in the storm’s rampage through the Northeast, including 80 in New York and New Jersey.

Some consumers with damaged vehicles may need to replace them with a new car, which automakers have said will boost sales eventually, said Mark Schienberg, president of the Greater New York Automobile Dealers Association.

But, Schienberg added, because of the distress caused by Sandy’s wrath, “Right now, I don’t think car sales are on the top of everybody’s mind.”

Last Thursday, Toyota Motor Corp, No. 3 in U.S. auto sales, said that 30,000 of October industry sales were lost due to less customer traffic or delayed purchases by consumers.

Each of the major automakers said they expected those sales to be recovered later in November or in December.

Six of the leading eight automakers in terms of U.S. sales said on Wednesday that at least 16,000 new vehicles were damaged, and the lion’s share of those will have to be scrapped.

Counting cars in consumer hands increases the total loss estimated to at least 266,000 vehicles.

“We believe that between 100,000 and 250,000 vehicles currently in operation could be removed from used vehicle supply once all is said and done,” said Laurence E. Dixon III, senior analyst with the National Automobile Dealers Association.

That compares with the 325,000 cars flooded during Hurricane Katrina, according to the National Insurance Crime Bureau.


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