The CDK Global hack significantly impacted sales in June. The cyberattack disrupted software systems at thousands of dealerships, forcing many to revert to manual processes, such as using pen and paper for transactions. This led to delays and reduced efficiency, contributing to a 5% decrease in new vehicle sales and 7% in used. The market is experiencing fluctuations in inventory and sales, with manufacturers and dealers adjusting prices to manage supply and demand dynamics effectively. The trends in aged inventory and day supply indicate potential areas for strategic focus to optimize inventory turnover and sales performance.
New Vehicles:
- Sales volumes fell by 5% while inventory increased by 7% causing day supply to increase by 6 days to 74 days MoM, a 33 day increase YoY.
- Aged inventory continued to rise, showing a 2% MoM increase to 50% and 14% YoY.
Used Vehicles:
- Day supply held relatively steady even with a 7% sales drop MoM.
- The markdown magnitude and percentage of sales remained consistent; however, the average last listed price declined by 4% YoY.
Recommended action steps for upcoming months:
- Scrutinize your inventory daily and recap it weekly.
- Carefully plot out a markdown strategy and make sure you are reviewing other dealers’ pricing in the market for markdown guidance.