East Coast auto dealers assess damage from Hurricane Irene

Although GM and BMW are the only auto manufacturers to have production facilities on the East Coast in the path of Hurricane Irene, all manufacturers have dealerships including some suppliers in the storm’s path.

While Hurricane Irene marched up the East Coast over the weekend and tornados spun off, killing as many as 22 people and leaving millions without power, the massive storm will be known more for its deluge of rain which triggered huge floods with reports of billions of dollar in property damage.

Obviously, this will affect the next quarter sales for most automakers, as it will affect the commisssions on sales at dealerships, not to mention the stocks themselves. For the record, stocks like General Motors (NYSE: GM), Ford Motor Company (NYSE: F) and even Toyota Motors (NYSE: TM) have been in a trading trough for the past two months already.

The fact that auto dealers keep most of their inventories out of doors does not bode well for profits let alone auto sales on the East Coast. Aside from the water intrusion from driving rain, think high wind damage from flying debris and, for sure, flooding; not to mention other possible damages that can come with a massive hurricane like Irene.

Then there are the buildings. For sure the cars can be easily replaced, but not so fast with the dealership buildings. This will affect sales for a longer term.

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Comments

Great story Frank. I would also advise people to be leery of hurricane damaged used cars hitting the market place soon. I wrote about it my used cars website at http://usedcars.about.com
Great idea for another article. Just how would you know a car has been in a flood or suffered hurricane damage? I especially agree with your assessment of Craig's List. Perhaps we should stay away for a while. Thanks for the heads up!
Quickest way to check for flood damage is to look in the trunk for signs there has been water (it often gets overlooked in thorough cleanings). There are other methods as well like picking up the floor mats and looking for water stains and rust in strange places. Inside of the car should never show rust under normal circumstances.

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