U.S. car sales expected to hold steady in June, CDK outages create uncertainty

New vehicle sales are expected to remain relatively flat in June while still ending the second quarter on a high note, despite a last-minute disruption caused by the CDK Global cyberattack.

What this means: Car sales have risen slowly but steadily throughout 2024, benefitting from improved supply and the return of incentives. However, ongoing challenges with affordability continue to constrain demand, leading many to search for signs of a more significant improvement.

What experts are forecasting:

While predictions differ between platforms, any difference between this year and the last is expected to be marginal. J.D. Power anticipates new vehicle sales between 1.34 million and 1.27 million units, down 2.6% to 7.2% from June 2023. On the other hand, Cox Automotive is forecasting a rough monthly sales volume of 1.39 million units, up 0.4% year-over-year.

• While it doesn’t seem like June will see a noteworthy difference in sales volume, Q2 is still likely to finish up from last year. Quarterly sales are forecast to hit 4.16 million units, a year-over-year increase of around 1%.

• New vehicle prices are still declining, although MSRPs remain higher when compared to pre-pandemic norms. The average transaction price this month is hovering around $44,857, a drop of 3%.

• While lower prices translate into tighter profit margins, the improvement in affordability is incentivizing car shopping. J.D. Power notes that buyers are close to spending $44.6 billion on new vehicles this month, the fourth-highest total for June on record.

Why it matters: While these numbers imply a stable market, new vehicle sales are still bottlenecked by a multitude of factors. High interest rates and low loan approval rates in the non-prime segments continue to deter car shoppers.

Although the effects of CDK Global’s outage have yet to make themselves clear, their impact on June’s sales can’t be dismissed. With the shutdown now expected to last until the end of the month, it should surprise no one if sales are only slightly different from last year.

That being said, consumers are still buying vehicles at a healthy rate, with sales remaining on track to hit 15.7 million units.

Bottom line: While this month’s sales are nothing special compared to last year, dealers should still feel encouraged by the overall stability, especially in light of recent events. Assuming business goes back to normal in the coming days, the industry can likely expect July to be more energetic.

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