US new vehicle sales barely grew in the second quarter and here’s why

DETROIT (AP) — New vehicle sales in the U.S. rose marginally in the second quarter, despite deeper discounts and slightly lower prices.

But more sales could be on the horizon: Auto industry analysts expect prices to continue to fall and there is a possibility that interest rates will be lowered, making borrowing on a new vehicle more affordable.

Overall, U.S. sales rose just 0.1 percent from a year ago as still-high prices kept many potential buyers out of the market, according to preliminary tallies from Motorintelligence.com released Tuesday.

Sales were hit in late June when cyberattacks knocked out CDK Global’s software that dealers use to process sales. CDK said most dealers had resumed normal operations by Tuesday afternoon, but companies including General Motors said some deliveries would not be made until the third quarter because of the problem.

Inventories are building up at dealerships, especially for pickup trucks and other higher-priced vehicles, analysts say.

Discounts vary based on demand for vehicles, and smaller, less expensive models and gas-electric hybrids are often in lower stock. Many customers are delaying purchases, anticipating deeper discounts to come.

“Waiting may be the best strategy,” said Charlie Chesbrough, chief economist at Cox Automotive.

Toyota, which sells many hybrids, saw sales rise 9.2% between April and June. Honda’s sales rose 2.7%, while General Motors’ sales rose just 0.3% and Hyundai’s 1.8%. Subaru’s sales increased 5.4%.

Stellantis sales fell 20.7% in the second quarter, with Ram down 26% and Jeep down 19%. Nissan sales fell 3.1% and Kia sales fell 1.6%.

Overall, automakers reported selling some 4.13 million new vehicles between April and June. That figure could meet forecasts of nearly 16 million for the year, slightly above last year’s 15.6 million.

Ivan Drury, chief information officer for Edmunds.com, said new-vehicle interest rates average just above 7 percent, a high figure for people who bought or leased vehicles years ago but now find themselves needing to replace their vehicles.

Many, he said, are going for the few lower-priced vehicles left in the $20,000 range.

“You really have to have a compelling product at an compelling price to get it moving today,” Drury said.