Experts Predict Stalled Sales in Q2

Edmunds analysts join the chorus of retail automotive experts who say second-quarter tallies will likely show dealers’ sales were flat, but brighter days appear ahead.

As WardsAuto has reported, Cox Automotive and other industry experts have cited high interest rates, economic concerns and rising prices as reasons for the stalled sales. Edmunds says the cyberattacks on CDK threw another negative into the sales mix, while Cox reports that the upcoming presidential election is making some would-be buyers skittish.

Still, Edmunds predicts summer sales will result in boosted Q3 numbers.

“(The) CDK cyberattacks have 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,” says Jessica Caldwell, Edmunds’ head of insights. “The good news is, unlike other black swan events that the industry has contended with in the past, sales shouldn’t be lost or severely deferred but rather pushed into the third quarter.”

Edmunds forecasts that 4,112,804 new cars and trucks will be sold in the U.S. in the second quarter of 2024, a 0.1% increase from the second quarter of 2023 and up 8.5% compared to the first quarter of 2024.
Cox analysts agree that retail automotive sales will likely rise throughout the year.

“Overall, dealer sentiment is likely worse than actual market conditions,” says Cox Automotive's Chief Economist Jonathan Smoke. “While profits are down from all-time highs, we still believe the dealer business is healthy. Retail vehicle sales have been fairly consistent so far this year, inventory has returned to reasonable levels, and we believe interest rates have likely hit a ceiling. With a good job market, the (retail auto sales) market is not collapsing, and we believe weak current market sentiment is more about uncertainty than actual performance.”

Now that inventory has risen for most franchised dealers, consumers do not need to rush into buying. Still, Ivan Drury, Edmunds’ director of insights, notes that consumers who want to buy should not wait in hopes that future deals will save them money — a point dealers may want to make with shoppers.

“The market has dramatically improved from last year, but we’re still aways away from any major summer sell-down events or 2025 model-year vehicles,” Drury adds.

See below for charts showing Edmunds' forecasts: