While many of the replacements for hurricane-damaged vehicles may be used cars, new vehicle sales are expected to rise this month.
With Texas and Florida recovering from the impact of hurricanes Harvey and Irma, new vehicle sales are expected to increase by 1% year-over-year in September 2017, resulting in an estimated 17.5 million seasonally adjusted annual rate seasonally adjusted annual rate or SAAR, according to a new estimate by Kelly Blue Book.
“September will be another opportunity for the first sales increase of the year, as we project slight growth for the industry,” said Tim Fleming, analyst for Kelley Blue Book.
“While major hurricanes devastated parts of Texas and Florida in the past month, this is driving replacement demand for those drivers with vehicles destroyed. This demand has already started in some areas, but will continue into October and potentially November, as vehicle insurance payouts are received,” he said.
Fleming said most consumers are likely to shop for used vehicles, but with used prices trending upward recently, some used buyers may opt to purchase new.
In addition, many automakers are offering hurricane relief incentives of up to $1,000. In these areas, car segments are likely to be shopped more, as these vehicles are the most affordable and in plentiful supply. Nationally, demand is still shifting steadily toward SUVs, he said.
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New car sales are expected to increase in September as vehicle owners impacted by Harvey and Irma replace lost vehicles.
In September, new light-vehicle sales, including fleet, are expected to hit 1.44 million units, up 0.7% compared with September 2016 and down 2.6% from August 2017.
The seasonally adjusted annual rate SAAR for September 2017is estimated to be 17.5 million, down from 17.6 million in September 2016 and up from 16 million in August 2017.
After a record year of sales in 2016 and seven consecutive annual increases, Kelley Blue Book’s forecast for 2017 calls for sales in the range of 16.8 and 17.3 million units, which represents a 1 to 4% decrease from last year.
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Toyota could have the best month of all automakers with projected growth of 9.5%, which would be the manufacturer’s most significant year-over-year increase since December 2015, KBB said.
Sales of the RAV4 crossover are surging, as it has become the top-selling model outside of pickup trucks, and this month looks strong for the vehicle as well. Meanwhile, the redesigned Camry is growing in availability and could offer a nice sales lift for Toyota, KBB said.
On the other hand, Hyundai-Kia could see its biggest declines, losing nearly one point of market share. The automakers’ SUVs are posting sales gains, including the Hyundai Tucson.
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But Hyundai-Kia’s lineup still leans heavily on cars, which are struggling. Some nameplates like the Kia Soul and Forte could have a good month, but Kelley Blue Book expects the brands’ cars could fall by 15% overall. Half of these sales declines are attributed to fleet and rental reductions versus last year.