The Cox Automotive forecast released July 25 indicates that U.S. July new-vehicle sales will show some recovery from the CDK Global ransomware attack in June.
In July, the seasonally adjusted annual rate (SAAR) is expected to rise to 16.0 million, an upward rebound from last month’s surprisingly low 15.3 million level, according to Cox officials
The sales pace had been forecast to finish much higher in June, but disruptions in dealership point-of-sale software programs prevented some sales from being fully completed and reported. Those sales will likely be captured in this month’s final tallies and, together with seasonal adjustments, will help push the pace above the market’s 15.5 million average over the last 18 months.
July Rebound
Charlie Chesbrough, senior economist at Cox Automotive, noted July’s new-vehicle sales are expected to finish within the range of 15-16 million, as it has consistently over the last year.
“However, July sales will likely include some sales that were delayed from June, which should push the market toward the upper end of the sales range,’ said Chesbrough. “How much is unknown, but tens of thousands of vehicles may have been affected.”
Ransomware Attack
CDK Global, whose software is used at 15,000 auto dealers, was first attached on June 19, in an event that hampered operations at U.S and Canada dealerships. The company was able to restore some functions back online by that afternoon—but its systems were attacked again before the business day started on June 20 and would be done for another two weeks.
The company reported that “substantially all” of the car dealerships that use its software were back online to its core management system by July 2, just in time for the July 4 holiday sales weekend.
According to a published report, CDK Global paid to cyber terrorists is believed to $25 million. Cyber experts said about 387 bitcoins were sent to a cryptocurrency account controlled by hackers affiliated with a type of ransomware called BlackSuit on June 21, the day after the company reported the cyberattack. BlackSuit is widely believed to be a rebranding of the Royal ransomware operation, a direct successor to the Conti cybercrime syndicate. Comprising Russian and Eastern European threat actors, this organized gang has been a persistent security concern.
July Decrease
According to Kelley Blue Book sales estimates, July sales volume is expected to fall to 1.29 million, down 1.3 percent from July 2023 and down 3 percent from June 2024.
Through the first half of 2024, monthly new-vehicle sales volume has averaged 1.31 million units. Total new-vehicle sales for calendar year 2024 are forecast by Cox Automotive to reach 15.7 million, an increase from 2023 and the best year since 2019.
Segment Breakdown
By segment, full-size pickups was the only sector to report positive year-over-year growth, up 2.4 percent at 185,000 sold. The category with the largest decline from June 2023 was mid-size cars, down 8.7 percent to 70,000.
Compact SUV/crossover is expected to have the largest number of new car sales, at 210000—down 5.7 percent from a year ago and 2.8 percent from June. Rounding out the sales for June are mid-size SUV/crossover at 205,000 (-0.5 percent), compact at 95,000 (-1.4 percent) and all other segments at 525,000 (+0.2 percent).
An outlier for the industry is fleet sales.
“Fleet sales are also unknown but will be an important factor in July’s result,” said Chesbrough. “Fleet sales can lift or suppress the monthly sales pace, and recent trends suggest less activity from this channel.”
