Hurricane Harvey’s Impact on Houston-Area Auto Groups

Hurricane Harvey

Hurricane Harvey’s impact on the state of Texas will be long-lasting beyond this month. In addition to the many businesses affected by Harvey, the aftermath also extends to the auto industry. The flooding is said to have destroyed as many as one million cars in the Houston area. As of last Thursday morning, there were over 100,000 insurance claims, with the majority categorized as totaled. The losses are estimated to rise to almost $5 billion. Behind California, Texas is believed to be the second largest industry for cars in the nation. One of the reasons for this is that Texan cities like Houston are car-dependent. According to Cox Automotive, almost 95 percent of households own a vehicle. This percentage has brought many auto groups to the area, and unfortunately, within Harvey’s recent path. Here are a few updates on groups and dealers within the area.

Harvey’s Effect on Houston’s Auto Groups

Group 1, an auto group with stores in Houston and Beaumont, published a statement on their website and spoke with various press outlets about their progress. The company experienced some facility damage, but most of their stores were spared from major repairs. Houston stores were reopened on August 30, while Beaumont stores were operational on August 31. Group 1 did comment that they were still looking to get their online stores running, but over 98 percent of their inventory survived the hurricane. They also commented on the well-being of their employees, nearly 500 associates suffered property losses and storm damage. The auto group’s foundation is stepping in to provide resources and disaster pay for those in need. Another Houston auto group, Bayway, did not suffer any physical damages to their Lincoln, Chevrolet, Fiat Chrysler, Volkswagen, or Volvo stores, but they did experience a loss of approximately 60 sales as a result of the storm. Bayway Auto Group owner, Darryl Wischnewsky told the Sharon Pennsylvania Herald that while his stores remained untouched, the saw other dealerships lose significant amounts of inventory and suffer severe damages along the freeway near his storefront.

The Impact on Staff and Employers

Houston-based Gillman Automotive Group took over 700 calls from customers whose cars were damaged during Harvey. On August 28, as the hurricane picked up steam in the area, owner Stacey Gillman closed all Houston area facilities. However, she still allowed customers to drop off damaged cars as long as they included handwritten notes about the details regarding their automobile. Now that her stores have reopened, the 700 calls are a preview of what is to come as she is expecting service departments to begin seeing wrecks. Thirty-five minutes away in Dickenson, Texas, the flooding destroyed McRee Ford’s entire stock of vehicles. Along with this, 40 of the dealership’s staff members have lost most of their belongings, including homes. On their website, they indicate that most of their services are operational, and they are receiving new inventory daily from places not impacted by the storm. In another part of Houston, the owner of Ron Carter dealerships was fortunate enough to store all his vehicles on higher ground, most were saved as a result, but his home was severely damaged in the storm. While a lot of attention is on the dealerships, the life situations of those impacted will also determine how storefronts bounce back.

Long-Term Recovery

While browsing the websites of dealers in the Houston and Beaumont area, it is easy to see that the auto community is prepared to do all they can to move forward. Dealerships like Kinsel Toyota and Volkswagen Beaumont had large advertisements on their websites detailing their dedication to get customers the service and help they need. These dealers, as well as others in the metropolitan area, are preparing for the onslaught of repair requests and automobile purchases. Residents are now in the assessment stages of filing claims with their insurance companies, so sales will likely increase in the latter part of the year after those are realized. Much of the impact will be localized, but since Texas holds a large sales chunk of the car industry, any impact on local dealers will have far reaching effects overall.