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Carmakers post healthy October sales, offer storm victims discounts

November 01, 2012|By Jerry Hirsch
  • The landscape in Sandy's wake is littered with damaged and destroyed autos, which could lead to stronger car sales in November and December. Above, a Volkswagen Beetle in front of a home in Long Beach Island, N.J.
The landscape in Sandy's wake is littered with damaged and destroyed… (Mark Wilson / Getty Images )

Hurricane Sandy blew away tens of thousands of auto sales and destroyed an undetermined number of cars. After expressing the appropriate sympathy for the victims of this week’s disaster, the industry is now jumping on the opportunity to sell those victims new cars.

General Motors Co. and Nissan North America’s Nissan and Infiniti brands all plan to offer special incentives and discounts for buyers of new vehicles in regions battered by the storm. More automakers are expected to follow.

GM, for example, is offering $500 toward a purchase or lease, on top of existing incentives, to people living in a federally designated disaster area. They must have proof of an insurance claim. The automaker said it considered the discount as a way to help victims offset their insurance deductibles.

Nissan and Infiniti are extending employee discount pricing and financing to disaster victims.

Automakers are announcing the deals as they post their monthly sales totals for October. The industry was dented by the storm, but overall the numbers look pretty good with October sales running at an annualized pace well above 14 million.

GM, Chrysler Group, Toyota Motor Corp., Honda Motor Co. and Kia Motors America all reported sales gains. Ford Motor Co. had a small increase. Nissan and Hyundai lost ground.

Jessica Caldwell, an analyst with auto information company, said it might be only days after the disaster, but the companies “generally refresh their incentives at the beginning of the month and there is a need for people to replace their cars.”

The storm struck several dense urban areas, including Manhattan, where people tend to own cars only if they really need them, said Rebecca Lindland, an analyst with IHS automotive.

“There is a reality that people are going to have to replace their cars and they will have to do it pretty soon,” Lindland said. “And keep in mind that this is all balanced by big contributions the automakers are making to the Red Cross and other relief organizations.”

The Chevrolet division of General Motors donated 50 Express cargo vans, Traverse crossover utilities and Tahoe full-size sport-utilities to the American Red Cross for use in relief and recovery efforts.

Toyota gave $1 million to the Red Cross and other nonprofit organizations to support relief efforts.

On average, the last three days of October account for about 17% of the monthly sales and since only a portion of the country was affected by the storm, the hit to sales was probably about 30,000 vehicles, according to There’s no estimate yet for the number of cars destroyed, both at dealerships, storage lots and at individual homes.

Nissan North America likely took the biggest hit in lost sales, analysts said.  Its October U.S. sales fell 3% to 79,685 vehicles compared with the same period a year earlier.

The storm caused “major disruption throughout the Northeast, which is our strongest performing region with more than 225 area dealers,” said Al Castignetti, vice president, Nissan Division.

American Honda said sales rose 9% in October to 106,973 units. But the gain wasn’t as big as expected, in part because of the disruption in the Northeast region, Caldwell said.

But overall, October was a good month for the industry.

Chrysler Group said its U.S. sales rose 10% to 126,185 vehicles compared with the same period a year earlier. It was Chrysler’s best sales total since 2007.

General Motors Co. also reported its highest October sales since 2007, with deliveries up 5% to 195,764 vehicles. Passenger car sales grew the fastest of any of auto segment.

Ford Motor Co. saw sales rise less than 1% to 168,456 for the month. The automaker’s passenger car business grew faster while sales of pickup trucks dipped slightly.

Ken Czubay, Ford’s sales chief, said he believes any lost sales will be quickly recaptured.

“Typically, after the insurance companies come in, people use that money to buy thse new vehicles,” he said.  

This could lead to stronger sales this month and next.

Toyota Motor Corp. said its sales rose 16% to 155,242 vehicles last month. The automaker is experiencing a rebound in sales from that were disrupted a year ago by inventory and production problems caused by a different natural disaster, the Japanese earthquake and tsunami.

Volkswagen of America said its sales rose 22% to 34,311 vehicles. That represents VW’s best October since 1972. The brand has had a 36% year-to-date increase and in just 10 months of sales has posted its best full calendar year tally since 1973.

Kia Motors America said it had its best-ever October sales with 42,452 units sold, a 13% gain from a year ago. It sister company Hyundai saw sales fall 4% to 50,271.


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