In Aftermath, Winners from Sandy Emerge
Michael is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
With the detriments of Hurricane Sandy still very much present today, some of the limited good news has emerged. While many sectors were negatively impacted by the super storm, the auto industry boomed: a much needed bump for many companies.
New vehicle sales climbed 15 percent in November as a result of car and truck replacement from Hurricane Sandy's damage, marking the best monthly sales rate in four years. The boom in sales should send total sales over analysts’ forecasts for most car manufacturers for the year, and will most likely indicate that the revival of the auto industry should carry into 2013.
The numbers released earlier this week show that 1.14 million vehicles in total were sold in November, marking an added 146 thousand in increased sales over last year’s total in the same month. With seasonal adjustments, this means an annual sales rate of about 15.5 million vehicles: a record rate since the beginning of 2008.
Of the 1.14 million vehicles, about 20,000 to 30,000 are supposedly attributed to consumers replacing damaged cars and trucks from Hurricane Sandy in October. 20,000 more cars are estimated to be replaced as a result of Sandy's damage over the next few months.
The U.S.’s largest automaker, GM (NYSE: GM), unfortunately was one of the stragglers to the sales increase party. They saw their sales increase, but only by 3.4%--believed to be a result of decreased truck sales, especially of the Silverado. In fact, the Silverado showed the biggest loss among changes of annual car sales among popular vehicles, dropping 10.4% in total sales this November compared to last November.
Ford (NYSE: F) saw a 6.4% increase in sales, marked by the increase in Focus and C-Max sales. GM’s total sales topped Ford by only 10,000 sales during last month.
Some of the biggest results came from Chrysler, who continued to pile up the good news this year, boasting a 14.4% increase in November. The car giant sold 122,000 vehicles, compared to Ford’s 177,000 thousand and GM’s 186,000.
Nissan’s sales jumped 12.9%, Toyota’s (NYSE: TM) shot up by 17.2%, and Honda… Well, to put it simply, Honda was incredibly impressive. Honda (NYSE: HMC), backed by their large East Coast market share, spiked up in sales by 38.9%. How? Sales of several of their cars and trucks posted incredible results with regards to the percentage change of sales of November 2012 from November 2011. Topping the list for Honda is the Accord, which rose 82.8%, the Civic, shooting up 75.5%, and the CR-V, at 36%. Such numbers prompted Jessica Cardwell, an analyst with Edmunds.com, a car research website, to admit that “Honda is the most popular brand in the tristate area.” She explained the bump by saying that “when life returned to normal, those car buyers quickly made up for lost time.”
Sales should jump even higher for 2013 according to industry executives. One potentially influencing factor is an increase in housing starts, which promotes businesses to purchase trucks, pickups, and utility vehicles.
However, some tax issues have those executives concerned. “We are going to be conservative and not issue a sales forecast for 2013,” Kurt McNeil, GM’s head of U.S. sales operations, said.
Michael Nolan has no positions in the stocks mentioned above. The Motley Fool owns shares of Ford. Motley Fool newsletter services recommend Ford and General Motors Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!