The storm did huge damage to the city of Houston and to the lives of its residents. Its devastation is biblical.
But the American auto industry, briefly depressed before the storm due to slowing sales and larger than normal inventory levels, is one of the few winners. The auto sector is about to get a significant boost from the aftermath of Harvey.
In fact, Harvey destroyed more vehicles – by a big margin – than did Sandy or Katrina. By some counts one million or so cars, including cars not yet sold in dealerships, were damaged beyond repair by Harvey. Conservatively, some 500,000 cars will need to be replaced immediately.
Houston is not a walking city – in fact, it is a huge pancake, spread out as far as one can see. Nearly all residents – rich and poor -- need at least one vehicle. There is already high demand for rentals and limited availability. As quickly as insurance companies issue checks, residents will be buying used and new cars, and paying higher prices than normal.
Auto companies are redirecting assets and moving new and used vehicles in rapidly. They will be handsomely rewarded immediately and for some time to come. Harvey clearly left misery and devastation in its wake, but the American auto industry unwittingly has found itself on the winning side for at least once.