**CDK Global: A Victim of a Cyberattack**
CDK Global, a software provider used by thousands of dealerships and service centers, recently fell victim to a cyberattack. The attack, which occurred on June 19, paralyzed computer systems and left dealerships struggling to perform basic tasks. CDK Global operates in over 15,000 retail locations across North America and offers a dealer management system (DMS) that handles transactions, financing, parts tracking, and customer relations management. The company, owned by Canadian private equity firm Brookfield Business Partners, was hacked by a group called BlackSuit, based in Eastern Europe, who demanded a ransom in the tens of millions.
**Impacts on Dealers and Customers**
The cyberattack on CDK Global has had severe repercussions for dealerships and their customers. New car purchases have been delayed or unable to be processed, leaving customers frustrated. More concerning are the customers who have their cars stuck in service departments. Repair orders cannot be closed until payment is determined, causing further delays. Customers relying on service work at Porsche and Lexus dealerships have also experienced delays and difficulties due to the attack. Larger dealerships like AutoNation and Lithia Motors are resorting to manual processes to continue serving their customers, albeit with lower productivity.
**The Prolonged Effects and Potential Solutions**
If the outage continues, dealerships will face more significant challenges. While some dealers believe that a short outage would be an annoyance and incur costs, an extended disruption lasting a month or more could pose severe problems. Dealership groups that are currently unable to use CDK Global’s DMS are considering alternative software providers such as SAP, Reynolds and Reynolds, and Dominion Enterprises. CDK Global’s handling of the situation has caused a trust issue for many dealers and has sparked consideration of other options.
**Implications for CDK Global**
Dealerships affected by CDK Global’s inoperable DMS are unhappy with the company’s response to the cyberattack. Communication has been unhelpful and vague, with dealers receiving generic mass emails. The lack of effectiveness in resolving the issue has further eroded trust. Poor car-buying experiences due to the outage may lead customers to take their business elsewhere, impacting CDK Global’s reputation. Dealerships, struggling to calculate leases manually, have even stopped offering leases altogether. The timing of the cyberattack is particularly detrimental, as it coincides with a crucial sales period for dealerships at the end of the month and quarter.
As CDK Global works to recover from the cyberattack, dealerships are considering their options and demanding better communication and solutions from the company. The long-term impact on CDK Global’s reputation and ability to retain customers remains uncertain.