US New Car Sales Expected to Drop in June Due to CDK Network Outage

According to a joint report by industry consulting firms J.D. Power and GlobalData, the new car sales in the United States are expected to decline in June due to a network outage at CDK Global, a major retail technology and software provider for the automotive industry.

The network failure at CDK is the latest challenge faced by American automakers, with over 15,000 retail points relying on its systems. CDK is working to restore its systems, but the outage has forced some U.S. car dealers to resort to manual paperwork in the meantime.

In June 2024, the total U.S. new car sales (including retail and non-retail transactions) are projected to range between 1,273,600 and 1,336,800 units, marking a year-over-year decrease of 2.6% to 7.2%.

The average transaction price for new vehicles in June is expected to be $44,857, a decrease of$1,372 from a year ago, representing a 3% decline. Meanwhile, the average incentive spending per vehicle is projected to increase by 51.2% from the previous year, reaching $2,625.

Furthermore, the total profit per vehicle for retailers (including gross margin plus income from finance and insurance) is expected to decline by 32.3% compared to June 2023, reaching $2,407.

Thomas King, President of Data and Analytics at J.D. Power, commented, “The June U.S. new car sales figures will not accurately reflect the true demand from consumers due to the disruption in dealership software systems.”

King added, “However, in the long run, the CDK outage will not affect overall demand. Sales may be delayed, but once the situation improves in July, most of the sales will return to normal. Despite the system interruption, sales are still being conducted.”