US second-quarter new vehicle sales growth slows after CDK cyber attack

FILE PHOTO: A car is shown for sale at a car lot in National City, California , U.S., June 15, 2022. REUTERS/Mike Blake/File Photo

By Nathan Gomes

(Reuters) -Top U.S. automakers reported slower growth in new vehicle sales for the second quarter after a software widely used by dealers in their daily operations suffered a cyber attack in the last few days of June.

General Motors reported a 0.6% rise in new vehicle sales, compared with a jump of 19% last year, and said some sales would shift to the current quarter due to the attack on CDK's Dealer Management Software.

Market research firm Cox Automotive estimates U.S. new-vehicle sales volume in the second quarter likely grew 1% to nearly 4.2 million units. New vehicle sales had surged about 16% year-on-year in the corresponding period in 2023.

"The CDK cyber attack has thrown a monkey wrench into sales during the second half of June, affecting what is arguably one of the most lucrative and busiest times of the month and quarter for dealerships," said Jessica Caldwell, head of insights at Edmunds.

The CDK outage was the latest hiccup for automakers in the United States, as more than 15,000 retail locations were relying on the retail technology provider for their dealer management software.

Hyundai said second-quarter U.S. sales rose by nearly 2%, compared with a 14% jump last year.

Analysts, however, expect vehicle retailers and automakers to recoup most of the lost sales in July.

Automakers have benefited from pent-up demand for SUVs, pickup trucks and hybrid vehicles. Discounts on certain models and incentives have also attracted price-conscious shoppers.

"New vehicle affordability concerns remain prevalent and inventories are not expected to advance as strongly as they have done over the past 12 months," said Chris Hopson, S&P Global Mobility analyst.

Electric-vehicle leader Tesla reported a smaller-than-expected 5% drop in vehicle deliveries in the second quarter, after price cuts and incentives helped stimulate demand.

(Reporting by Nathan Gomes in Bengaluru; Editing by Shilpi Majumdar and Devika Syamnath)