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Texas Dealers Scramble to Assess Damage, Reopen for Business

September 5, 2017 0 Comments

In the wake of Hurricane Harvey, Houston-area dealerships and automakers are working hard to reopen their stores and “beef up” inventory, anticipating thousands of flood-damaged vehicles that will need replacing.

Pete DeLongchamps, vice president for manufacturer relations at Group 1 Automotive, Inc., said the company prepared for Harvey using a plan designed post-Katrina, which included moving their inventory to higher ground and cleaning out roof drains to prevent cave-ins.


 

Thanks to these preparations, Group 1 lost a “relatively small percentage” of their inventory and opened their 25 dealerships in the Houston and Beaumont areas by the end of August.

 

“Things have been moving fast and furious with a large number of tow-ins already. Our customers have lost a lot of vehicles we need to help them replace,” said DeLongchamps.

 

AutoNation also reopened all 17 of its Houston stores by the end of August, and was moving in vehicles from other regions, according to company spokesman Marc Cannon. AutoNation is still assessing its lost vehicles, but the company had moved inventory to higher ground prior to the storm.

 

AutoNation plans to move between 500 and 1,000 used vehicles to an AutoNation used car store for a sale slated for September 21-23. By then, would-be buyers should have their insurance checks for damaged vehicles, Cannon said.

 

Hurricane Harvey, bringing record flooding and killing at least 35 people, is expected to “briefly depress” U.S. auto sales – which weren’t doing so hot anyway – but could actually boost auto demand later on as people look to replace their damaged cars.

 

General Motors Co. spokesman Jim Cain said the number of vehicles damaged at its dealerships “is relatively modest.”

 

“But there are still several dealerships that are inaccessible, so the number will increase,” Cain added. GM will move new and used vehicles to Houston, “but it won’t be done until the infrastructure and our dealers are ready.”

 

Ford Motor Co. is still assessing the damage as well, said a spokeswoman.

 

CarMax Inc., the largest used car operation in the United States, reopened Houston stores on Labor day, according to spokeswoman Claire Hunter. “We are mobilizing additional inventory to the region as we speak,” said Hunter.

 

Paul Lips, chief operating officer at ADESA, said that their Houston inventory is “dry and ready for sale.” “Once roads are clear and employees can return safely to work, we will reopen for business as usual,” Lips said.

 

DeLongchamps said that the high-inventory problem that plagued the auto industry prior to Harvey has become a positive thing. As vehicles sell in the aftermath of the storm, Group 1 plans to replenish their Houston inventory from other dealer surpluses.

 

“We have one guy in our office here whose sole job is to match inventory to sales [in the Houston area],” DeLongchamps said. “We call him the ‘inventory czar.’”

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The DrivingSales News team is dedicated to breaking the relevant and the tough stories affecting car dealers. Have questions for DrivingSales News? Reach the team at news@drivingsales.com.

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