Why Hurricane Sandy Fallout Will Hit Luxury Carmakers Particularly Hard

Many of the estimated 4,751 car dealers in the states affected by Sandy spent the run-up to the storm moving their inventory to high ground if possible and bracing their dealerships for the storm. Many had already been through Hurricane Irene had some practice, but, as one dealer said, the water levels before Sandy hit were already at Irene levels, so all they could do was hope they got it right.

It's not that there's ever a good time for a civilization-battering natural disaster, but for dealers, Hurricane Sandy coming at the end of the month was the worst possible time. These last few days of the month are when they'd be discounting cars and courting shoppers to meet their monthly quotas. Luxury dealers might take the brunt of the hit, as a report in Bloomberg indicates that Volvo, BMW, Mercedes-Benz and Acura sell from 23 to 25 percent of their wares in New York, Washington and Philadelphia.

According to the The New York Times, as of Tuesday night there were eight million people without power due to the storm, 2.3 million of them in New York state and another 2.6 million in New Jersey. Power outages there might last the rest of the week, if not longer. The Washington Post reported that the D.C. area is getting back to business, but it was shut down entirely for two days. Elsewhere, it's been reported that "the Northeast back to business," but that's the business of cleaning up, not the business of selling cars.

The 'good' news, relatively speaking, for dealers and the luxury makers is that Hurricane Sandy didn't change analysts' sales predictions for the month, nor the year. October is traditionally the slowest month of the year anyway, and the annualized rate of 14.8 to 14.9 million 2012 sales might be a little soggy, but appears to have emerged intact.