US new vehicles sales growth likely slowed in second quarter

Growth in US auto sales likely slowed significantly in the second quarter, marred by a cyber incident at CDK, even though steady demand and better availability kept the sales for new vehicles elevated. 

Market research firm Cox Automotive estimates US new-vehicle sales volume in the second quarter to grow 1% to nearly 4.2 million units. New vehicle sales had surged about 16% year-on-year in the corresponding period in 2023. 

Industry experts have forecast some impact to sales after a cyber incident at retail technology and software provider CDK affected dealers across the country in June. 

“The CDK cyberattacks have thrown a monkey wrench into sales during the second half of June, affecting what is arguably one of the most lucrative and busiest times of the month and quarter for dealerships,” said Jessica Caldwell, head of insights, Edmunds.

The CDK outage was the latest hiccup for automakers in the United States, with more than 15,000 retail locations in the country relying on the retail technology provider for their dealer management software. 

Analysts expect vehicle retailers and automakers to recoup most of the lost sales in July. 

Automakers have benefited from pent-up demand for SUVs, pickup trucks and hybrid vehicles. Discounts on certain models and incentives have also attracted price-conscious shoppers. 

General Motors (GM) is expected to hold its top spot in the quarter, closely followed by Toyota Motor’s (TOYO) North America unit and Ford (FORD), according to Cox. 

Automakers launching more affordable feature-packed models also attracted some buyers looking to switch their older vehicles. 

Cox, however, remained “concerned” over auto sales growth not being able to hold gains over the latter part of the year due to uncertainties, including the US presidential election. 

“New vehicle affordability concerns remain prevalent and inventories are not expected to advance as strongly as they have done over the past 12 months,” said Chris Hopson, S&P Global Mobility analyst.