CDK tells car dealers their systems will likely be down for days

Auto dealerships across the United States are facing significant disruptions due to a cyberattack on CDK Global, a key software provider used by many to manage their operations. According to a Bloomberg report, CDK Global suffered a second major cyber incident, leaving systems offline and dealers without access to crucial services like transaction processing and customer record management. As indicated in a company communication, there is no estimated timeframe for when services will resume.

CDK Global, which supports about 15,000 dealerships, announced the system shutdown began late Wednesday, anticipating services would be down at least through Thursday. This has severely impacted dealers’ ability to conduct business, especially on a busy U.S. holiday, with reliance being shifted to manual paper processes.

In Canada, the impact is similarly felt, with dealers preparing to digitally log any transactions made during this period once systems are operational, said Tim Reuss, president of the Canadian Automobile Dealers Association. He predicted ongoing complications even after the system is restored.

Publicly traded auto dealers like AutoNation Inc., Lithia Motors Inc., Group 1 Automotive Inc., and Sonic Automotive Inc. saw declines in their share prices following the outage.

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This incident reflects broader vulnerabilities as other dealers using different dealership management systems from competitors such as Reynolds & Reynolds Co. and Dealertrack also reported disruptions.

In efforts to mitigate the crisis, dealers are adopting temporary measures. For instance, Sam Pack’s Five Heroes Chevrolet managed to sell vehicles by reverting to manual processes, but still faced challenges like vehicle titling.

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The resurgence of this issue underscores the need for improved cybersecurity measures within such essential business tools, a sentiment echoed by the affected dealers and the National Automobile Dealers Association, which is actively seeking more information on the breach.

CDK Global, initially part of Automatic Data Processing Inc., became an independent entity following a 2014 spin-off and was recently acquired in 2022 by Brookfield Business Partners in a deal worth US$6.4 billion.

Words by: Craig Clowes