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Sales of new vehicles slowed down in June, aided in part by the cyberattacks on CDK Global, which took out software car dealerships rely on for their work.
Between 1.27 million and 1.33 million new vehicles are projected to be sold this month, according to a Wednesday forecast published by J.D. Power and GlobalData. That’s a roughly 7.2% decrease compared to last year.
Most of those sales come from retailers, which are projected to report a decrease between 2.5% and 8.2% compared to June 2023. But, according to J.D. Power’s head of data and analytics Thomas King, that’s not because of low demand.
“Because of the disruption to dealer software systems, June sales will not be reflective of actual consumer demand for new vehicles,” King said in a statement. “Instead, a significant number of sales that would have occurred in June are now likely to occur in July.”
The disruption King refers to is the June 19 cyberattack against CDK, which provides dealer management software to almost 15,000 car dealerships across North America. It also works with more than 1,000 heavy truck locations across the continent.
The incident forced CDK’s software down, leaving dealerships scrambling for alternative ways of doing business. Many firms have been unable to access important customer documents, forcing them to scale back business and find alternative methods of conducting their work.
“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,” King noted.
On Wednesday night, CDK said a “small initial test group of dealers” have regained access to its dealer management system, noting that it will begin restoring access to more clients once initial testing is complete. The company expects to fully restore access early next month. In the meantime, CDK has created an online portal with commonly used documents to support firms who still lack access.
“We understand and share the urgency for our customers to get back to business as usual, and we will continue providing updates as more information is available,” CDK said in a statement.
Despite June’s disruption, J.D. Power said July will be better, primarily because most of the lost sales this month will be recovered. Plus, the extended July 4th holiday weekend will be a major help.