Auto Retailers Face Major Disruption as CDK Global Suffers Another Cyberattack
In a second blow to auto retailers, CDK Global, a software provider relied upon by thousands of dealers in the U.S., has experienced yet another cyberattack. This incident comes on the heels of a previous disruption just days before, leaving dealers frustrated and unable to run their stores efficiently.
CDK Global, a crucial software provider for dealerships, informed its customers about the cyberattack, which occurred late the night before the announcement. As a result, the company had to shut down most of its systems and was unable to provide an estimated timeline for restoring services. This left dealers with a minimum of a day without access to CDK’s systems, causing significant disruptions in their day-to-day operations.
On a busy U.S. holiday for business, dealers reliant on CDK were unable to complete transactions, access customer records, schedule appointments, or handle car-repair orders. With nearly 15,000 dealerships served, CDK supports various aspects of dealership operations, from front-office salespeople to back-office support staff and parts-and-service shops.
The impact of this cyberattack has not been limited to dealerships alone. AutoNation Inc., along with other publicly listed dealership groups such as Lithia Motors Inc., Group 1 Automotive Inc., and Sonic Automotive Inc., witnessed a decline in their shares on Thursday. AutoNation Inc. saw its shares fall by as much as 4.6% in intraday trading.
Greg Thornton, general manager of a dealership group in Frederick, Maryland, shared his experience with the CDK customer-relations software outage since Wednesday morning. The lack of communication from CDK has left him and other dealers in the dark regarding solutions or possible timelines for resolution.
Seeking clarification on the situation, the National Automobile Dealers Association actively reached out to CDK for information on the nature and extent of the cyber incident. The association’s efforts indicate the gravity of the situation, as dealerships nationwide struggle to overcome the disruptions caused by these attacks.
CDK Global, which was spun off from Automatic Data Processing Inc. in 2014, had recently agreed to be acquired by investment company Brookfield Business Partners for a staggering $6.4 billion. This cyberattack poses a serious challenge to the company’s reputation and ability to deliver reliable services to its customers.
As cyberattacks become increasingly common in today’s digital world, businesses must take proactive measures to protect their systems and data. The automotive industry, an attractive target for cybercriminals due to its reliance on technology, must invest in robust cybersecurity measures to safeguard dealerships and ensure smooth operations for both employees and customers.
The recent cyberattacks on CDK Global highlight the vulnerabilities faced by auto retailers and the urgent need for enhanced cybersecurity across the industry. It serves as a wake-up call for businesses to prioritize cybersecurity investments and establish robust protocols to prevent future disruptions. Collaborative efforts between software providers, dealerships, and industry associations are crucial to address these threats effectively and maintain the stability of the automotive retail sector.