Second Quarter Likely Saw a Slowdown in U.S. New Vehicle Sales Growth

In the dynamic landscape of the U.S. automotive market, the growth of auto sales showed signs of slowing in the second quarter, impacted by a cyber incident at CDK. Despite this setback, consistent consumer demand and improved vehicle availability helped maintain robust sales figures for new vehicles.

Cox Automotive, a prominent market research firm, projects a modest 1% increase in U.S. new-vehicle sales volume for the second quarter, reaching close to 4.2 million units. This growth rate marks a significant deceleration from the previous year’s surge of approximately 16% during the same period in 2023.

Following the cyber incident at CDK, industry experts anticipate some disruptions in sales. The incident, which affected dealers nationwide in June, is expected to have an impact on one of the most crucial selling periods for dealerships.

Jessica Caldwell, head of insights at Edmunds, noted, “The CDK cyberattacks have disrupted sales during the latter part of June, affecting a period that is traditionally busy and profitable for dealerships.”

The outage at CDK adds to a series of challenges faced by automakers in the U.S., as over 15,000 retail locations rely on the technology provider for their dealer management software.

Analysts remain optimistic about the recovery of lost sales in July, as vehicle retailers and automakers are expected to make up for the downturn experienced in June.

Automakers have capitalized on pent-up demand for SUVs, pickup trucks, and hybrid vehicles. Additionally, attractive discounts and incentives on select models have appealed to budget-conscious shoppers in the market.

General Motors (GM) is anticipated to maintain its position as the leading automaker in the quarter, closely followed by Toyota Motor’s (TOYO) North America unit and Ford (FORD), according to Cox.

The introduction of more affordable models with advanced features has also enticed buyers seeking to upgrade from their older vehicles.

However, despite these positive trends, Cox expresses “concern” about sustaining auto sales growth in the latter part of the year due to uncertainties, such as the upcoming U.S. presidential election.

Chris Hopson, an analyst from S&P Global Mobility, highlighted, “Challenges related to new vehicle affordability and inventory constraints may hinder the strong advancement witnessed over the past year.”