Chief economist Jonathan Smoke addresses loss estimates
Cox Automotive: Value of Harvey-damaged vehicles could reach nearly $5 billion
Friday September 1, 2017
Article Highlights
- ox Automotive chief economist Jonathan Smoke on Friday estimated vehicle losses caused by Hurricane Harvey to come in between $2.7 billion and $4.9 billion in the Houston market alone.
- While that projected figure includes dealerships’ used-vehicle inventory since those units are classified as vehicles in operation, Smoke indicated that loss figure could swell even more once the damage toll of new vehicles flooded at franchised dealerships is tabulated, too.
- “No question this is the biggest event in history in terms of the total volume of vehicles damaged,” Smoke said. “This is going to have lingering effects on the wholesale market for some period of time in terms of increased volumes that should be going to salvage and working their way through the system. But also in terms of the industry and consumers having to deal with their own due diligence in tracking vehicles that could have been damaged but didn’t get properly identified as damaged, and therefore, salvage.”
Cox Automotive chief economist Jonathan Smoke on Friday estimated vehicle losses caused by Hurricane Harvey to come in between $2.7 billion and $4.9 billion in the Houston market alone.
While that projected figure includes dealerships’ used-vehicle inventory since those units are classified as vehicles in operation, Smoke indicated that loss figure could swell even more once the damage toll of new vehicles flooded at franchised dealerships is tabulated, too.
“Our hearts go out to the people of Houston and everyone impacted by the weather,” Smoke said to open a conference call Cox Automotive hosted for the media before delving into the loss estimates.
Smoke reiterated his previous assessment that 300,000 to 500,000 vehicles are likely damaged just in Houston; the seventh market largest by population and eighth largest for vehicles in operation consisting of 5.6 million units.
“We reviewed damages numbers in both (Hurricane) Katrina and (Superstorm) Sandy, which were the most comparable storms. We looked at the reporting of wide-spread flooding, which more resembled Katrina than Sandy. We took into account the high vehicle density and the dependency on vehicles in Houston,” Smoke said.