CDK cyberattack and economic factors slow down US car sales in Q2

The US auto industry faces challenges in the second quarter as Ford and General Motors report slower sales growth following the cyberattack that disrupted a critical software system used by dealerships nationwide. The outage at CDK in late June impacted over 15,000 retail locations during a crucial selling period, adding to the hurdles already faced by automakers due to supply chain disruptions. Despite hopes for a post-pandemic surge in vehicle demand as more people returned to work, high borrowing costs and economic uncertainties flattened these expectations.

Ford’s quarterly sales saw a modest 1% increase to 536,050 vehicles, a significant slowdown compared to the 10% growth in the previous year. Similarly, Toyota Motor’s local unit and Honda also experienced decelerated sales growth in the second quarter. Analysts anticipate automakers to recover lost sales. CDK reported progress in restoring the dealer management system, with most dealer connections already operational.

Ford attributed its growth in the quarter to the success of hybrid and electric models, with sales of gas-powered vehicles declining by 5%. In comparison, EV and hybrid vehicle sales rose by approximately 61% and 55%, respectively. In June, US new vehicle sales reached around 1.32 million units, translating to a seasonally adjusted annual rate of 15.29 million units per data from Wards Intelligence released on Tuesday.