The cyberattack that affected U.S. dealerships is expected to have a “significant” impact on sales for the month of June, according to J.D. Power officials.
“Because of the disruption to dealer software systems, June sales will not be reflective of actual consumer demand for new vehicles,” stated Thomas King, president of the data and analytics division at J.D. Power. “Instead, a significant number of sales that would have occurred in June are now likely to occur in July.”
According to a joint forecast from J.D. Power and GlobalData, total new-vehicle sales for June 2024, including retail and non-retail transactions, are projected to reach between 1,336,800 and 1,273,600 units, a 2.6 percent to 7.2 percent decrease from June 2023.
New-Vehicle Sales for June Decrease
The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be between 14.7 million and 15.4 million units, down between 0.7 million and 1.4 million units from June 2023.
New-vehicle retail sales for June 2024 are expected to decrease when compared with June 2023. Retail sales of new vehicles are expected to reach between 1,009,845 and 1,073,000 units, a 2.5 percent to 8.2 percent decrease.
The projection are a fallout from the ransomware attack against CDK Global that started June 19. The company reported it brought a “small initial test group” of auto dealerships back online June 27 and would continue to working to bring additional applications back online, such as its customer relationship management and service solutions, as well as its customer care channels.
The company has previously stated it doesn’t believe its systems will be back online before June 30, forcing auto dealerships to create workarounds in their sales and service departments.
“Significant” Disruption
King stated before the attack, the total sales forecast was tracking at 1.41 million units. He was optimistic that this was just a bump in the road for the industry as it will not affect overall demand in the long term.
“Indeed, if there is one thing that the pandemic demonstrated to the auto industry, it’s that dealers are very adept at dealing with adversity and have been effective in rapidly identifying ways to deliver vehicles to buyers,” said King.
New-vehicle total sales for the first half of 2024, which had two more that 2023, are projected to finish between 7,794,500 units and 7,857,700 units, a 0.4 percent to 1.2 percent increase from the first half of 2023 on a selling day adjusted basis. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 1.7 percent to 2.5 percent from a year ago.
A Hot July
New-vehicle retail sales for the first six months 2024 are projected to reach between 6,273,900 and 6,337,000 units, a 0.6 percent to 1.6 percent increase from the first six months of 2023 on a selling day adjusted basis. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 1.9 percent to 2.9 percent from a year ago.
Looking ahead, King projects sales in July to offset any loses occurred from last month.
“Sales will be delayed, but the majority will likely occur in July shortly after the situation is rectified and sales are being made despite system outages,” said King. “Looking forward to July, we expect the dealer software system disruptions to be rectified and most of the lost June sales recovered within the month. Also, a robust start to July is expected due to the extended July 4th holiday weekend.”