Hurricane Sandy Heightens Sales Divide Between Detroit & Foreign Automakers

December 6, 2012

Five weeks after Hurricane Sandy made landfall, life across much of the northeast has returned to normal (or a rough approximation thereof). But some automakers have followed an easier road to recovery than others. 

Reporting on the strong state of the U.S. auto market, Detroit News mentions that Hurricane Sandy is having a positive effect on sales, as consumers receive insurance settlements to replace vehicles destroyed by the storm. That's to be expected: though wars and natural disasters can devastate communities, economies often rebound when businesses and individuals begin picking up the pieces.

Ford, for example, estimates that Sandy will generate an additional 20,000 to 30,000 new vehicle sales. Undoubtedly, Ford feels a great deal of compassion for the storm's victims, which is why the automaker -- along with many others -- has contributed so much to the recovery efforts. But the jump in sales is a silver lining, no?

Well, yes and no. While the sales undoubtedly help Ford dealers, they also exacerbate a growing problem: Detroit's declining market share, particularly in the northeast. Last year, Ford held 16.7% of the U.S. market, but as of November 30, that figure had dropped to 15.5%.

General Motors has fallen even farther, from 18.1% market share last November to 16.3% in November 2012. Chrysler experienced a smaller decline, but still fell one-tenth of a point, to 10.7% of the U.S. market.

TrueCar's Jesse Toprak says that's in part because imports are more popular in the area of the U.S. affected by Sandy. So, while many Sandy victims who owned foreign brands are likely to replace those vehicles with another foreign model, public opinion and popularity may cause some Detroit-brand owners to shift to Asian or European marques.

Toprak's hypothesis is borne out by sales at Honda, which are up 38.9% for the year. The company's market share has surged, too, leaping from 8.4% last November to 10.2% this year. That increase is partially due to Honda's recovery from 2011's natural disasters in Asia, but post-Sandy sales have had a role as well. The only other auto brands to experience year-over-year increases in U.S. market share are also foreign: Audi, BMW, Subaru, Toyota, and Volkswagen.

The degree to which this shift can be attributed to Hurricane Sandy is a matter for debate. However, if Toprak and other analysts are correct, the trend could continue for months to come.

[h/t John Voelcker]

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