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Hurricane Katrina quashes cars, dealers, livelihoods

In need: A US Red Cross Hummer donated by GM.

Hurricane Katrina crushes cars and livelihoods in New Orleans and southeast US

General News logo13 Sep 2005

AS THE human cost of Hurricane Katrina continues to rise, the storm has wiped out up to 70 car dealerships across the southern United States.

Analysts say this, combined with the oil price shock, had the potential to harm the US auto industry in the coming months, according to the Detroit Free Press.

Sales have virtually stopped in many south-eastern cities and high petrol prices continue to eat into disposable incomes, potentially cutting sales of large 4WDs.

However, some analysts are predicting a flipside to the hurricane as survivors put their lives back together and are in need of new cars.

Many dealers are among the thousands who have been evacuated from the south, leaving inventory sitting under metres of water.

Louisiana Automobile Dealers Association executive vice president, Bob Israel, said most dealerships remained under water in and around New Orleans.

He was not sure how the wrecked cars would be removed once floodwaters had receded.

Insurance claims adjusters from Ford, DaimlerChrysler and General Motors are ready to survey damage in Louisiana and most car company finance arms have deferred loan repayments to affected customers.

At least five Toyota dealers were destroyed in New Orleans and the company expects at least 10 more to be in comparable shape.

Most car manufacturers have made vehicle and cash donations to the American Red Cross and other agencies - Toyota last week pledged $US5 million, for example, and GM has donated $US400,000 and more than 150 vehicles.

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