DMS Outage Could Ding June Sales

The CDK dealer management system shutdown is being blamed in one forecast for a down June vehicle sales volume, while another prediction doesn’t expect that level of impact.

A joint J.D. Power-GlobalData forecast sees June deliveries down up to 7% year-over-year, with the retail portion down as much as 8%.

It characterizes the DMS outage, which has resulted in some dealers resorting to handwritten sale document processing, as “significant.”

“Because of the disruption to dealer software systems, June sales will not be reflective of actual consumer demand for new vehicles. Instead, a significant number of sales that would have occurred in June are now likely to occur in July,” said J.D. Power’s Data and Analytics Division President Thomas King in a press release on the forecast, which the companies qualified because of the uncertainty over exactly when CDK’s systems will be restored and how dealers will compensate in the meantime.

J.D. Power said most delayed June sales will likely be finalized next month and expressed confidence that dealers will adapt as they did during the pandemic to “rapidly identifying ways to deliver vehicles to buyers.”

The forecast put combined retail and nonretail sales to be between 1.2 million and 1.3 million, down about 3% to 7%, for a seasonally adjusted annualized rate of 14.7 million to 15.4 million. It said the retail portion is down an estimated 3% to 8% to about 1.1 million for the month.

Meanwhile, the S&P Global Mobility forecast puts June sales up by a modest 1% despite the shutdown, which it acknowledges “could hamper some of the progress realized earlier in the month” along with a Toyota-Lexus stop-sale.

“June auto sales are expected to sustain the recent progress in the market” due to expanding inventory and incentives, said Principal Analyst Chris Hopson.

CDK said this week that it doesn’t expect its software systems to be back up for all dealers before June 30.

“Should you need to make alternate plans for your month-end financial close process, you should do so,” said spokesperson Lisa Finney.

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