Massive computer outage at car dealerships could last for days, company says | CNN Business (2024)

Massive computer outage at car dealerships could last for days, company says | CNN Business (1)

Paragon Honda and Acura car dealership in the Queens borough of New York on July 15, 2021.

CNN

US and Canadian auto dealerships remained at a near-standstill on Thursday because of a second cyber incident at data provider CDK Global, whose software is used at 15,000 auto dealers – an outage that could last for days, perhaps eating into sales over the first official weekend of summer.

On Wednesday, CDK spokesperson Lisa Finney said in a statement shared with CNN: “We are actively investigating a cyber incident. Out of an abundance of caution and concern for our customers, we have shut down most of our systems and are working diligently to get everything up and running as quickly as possible.”

Later that day the company announced that most of the critical computer systems were back online. But Thursday morning, the company sent dealerships another message indicating things had a taken a turn for the worse.

“Late in the evening of June 19, we experienced an additional cyber incident and proactively shut down most of our systems. In partnership with third party experts, we are assessing the impact and providing regular updates to our customers,” CDK said in a statement shared Thursday morning. “We remain vigilant in our efforts to reinstate our services and get our dealers back to business as usual as quickly as possible.”

The company later told dealers the systems could be down for several days, according to two sources briefed on the situation.

CDK operates numerous different products that car dealers use to handle things like keeping records of negotiated deals to scheduling and communicating about service. Not every dealer uses CDK’s products, and even those that do may not use them for everything, but the system shutdown has been a problem for many.

“We have customers coming in today who had deals saved in the system,” said Jeff Ramsey, an executive with Ourisman Auto Group, which is headquartered in Maryland.

To protect customer privacy, customers’ details aren’t written out on a piece of paper that’s just sitting on a desk anymore. Instead, information about deals and customer appointments is kept in a server that’s now impossible for his salespeople to access.

How this affects buying a car now

Ramsey said he understands, though, that CDK is doing what it feels it must to secure this sensitive data. But it’s a major hassle in the meantime and could cost his dealerships some business. Customers who are delayed in closing a sale at one of his dealerships could just find a dealer nearby that’s not having these issues and buy a new vehicle there, instead.

It’s car buying season, so it’s a real concern.

“We’re in the summer months,” he said. “This is where we need systems functioning.”

Ramsey and Brian Benstock, general manager of Paragon Honda and Paragon Acura in Long Island City, New York, both said they were continuing to do business and were selling cars in spite of the problems.

“My selling team can hand-write a buyer’s order,” said Benstock.

But salespeople could lack access to customer agreements that had been previously negotiated, making it harder to close those sales, dealers CNN spoke with said. There’s more than just the negotiated price of the car involved, since these agreements can involve rebates and incentives, some of which customers must show they’re qualified for.

Ramsey, whose company operates a number of dealerships, said automakers including Kia, Toyota and Stellantis, which makes Jeep and Dodge vehicles, have been very helpful with finding ways serve customers even with all technology issues.

Ford also said its dealerships involved in the CDK outage have alternate ways to take care of customers.

“Although there is an industry-wide system outage for some dealers who use CDK, Ford and Lincoln customers are able to receive sales and service support due to alternative processes available to our dealers. While a customer’s local dealer remains the best place for information about their sales and service needs, they can always contact the Ford Customer Relationship Center at 1-800-392-3673,” Ford said in a statement shared with CNN.

Not just car sales, but parts and service can also be disrupted.

The bigger hassles will be for the dealership’s accountants and businesspeople, Benstock said. Plenty of his employees have been in this business since before it became networked and computer dependent, he said, but it’s still a problem and he’s still worried about customer data.

Massive computer outage at car dealerships could last for days, company says | CNN Business (2024)

FAQs

Massive computer outage at car dealerships could last for days, company says | CNN Business? ›

US and Canadian auto dealerships remained at a near-standstill on Thursday because of a second cyber incident at data provider CDK Global, whose software is used at 15,000 auto dealers – an outage that could last for days, perhaps eating into sales over the first official weekend of summer.

How many dealerships use CDK? ›

CDK offers cloud-based software to more than 15,000 auto dealerships across North America that manages vehicle acquisitions, sales, financing, insuring, repairs and maintenance.

Did CDK pay ransom? ›

It is unclear whether CDK chose to pay the ransom, although one news outlet reported that they did. The software company managed to restore services to a small test group of dealers a week after the attack and has since been bringing more dealerships online.

Is there still a car shortage in 2024? ›

The automotive supply chain will likely never look like it did pre-pandemic, but inventory levels generally recovered in 2023 and are expected to continue doing so in 2024 and 2025. Car prices remain elevated in 2024 due to inflation but are showing initial signs of decreasing as inventory stabilizes.

Who hacked CDK? ›

Multiple outlets later reported that the group behind the attack was identified as BlackSuit, a cybercriminal team that spun off of an older, Russian-linked hacking group called RoyalLocker, according to Reuters.

Who bought out CDK? ›

On April 7, 2022, CDK Global agreed to be acquired by Brookfield Business Partners and institutional partners for a total enterprise value of $8.3 billion. The deal offered CDK investors $54.87 for each share held, representing a 30% premium. Brookfield completed the deal on July 6, 2022.

What company owns the most dealerships? ›

In comparison, Lithia Motors has continuously expanded its dealership network without falter since 2014, acquiring 32 locations in 2022 alone. With over 290 storefronts, it now claims to have surpassed AutoNation in size, making it the biggest dealer group in the U.S.

How long is the new car shortage expected to last? ›

New inventory is expected to reach pre-pandemic norms in 2024, with almost 3 million units available, or three times the amount during the chip shortage. Days' supply will stay healthy. New-vehicle transaction prices are expected to decline moderately.

Is the car industry in trouble? ›

After enjoying a strong rebound in sales in 2023, the auto industry appears headed for slower growth this year as consumers struggle with elevated interest rates and high prices for new cars and light trucks. Edmunds, a market researcher, expects the industry to sell 15.7 million vehicles this year.

What is the average car payment in 2024? ›

Average monthly car payments for new and used vehicles jump slightly year over year. The average car payment for a new vehicle is $735 monthly, according to first-quarter 2024 data from Experian — up 0.4% year over year. With the same jump of 0.4%, used cars have an average monthly payment of $523.

What is the most hacked CMS? ›

But WordPress is the most popular CMS on the Internet. It's also the most hacked. For example, in 2020, Wordfence reported more than 2,800 attacks per second targeting WordPress.

Can you find who hacked you? ›

You can also look up your hacker's IP address in various IP Abuse databases (such as abuseipdb.com) to see if other people have reported problems with the same IP address. There is a slim chance that this may give you more information about your attacker.

Who handles hackers? ›

The FBI is the lead federal agency for investigating cyber attacks and intrusions. We collect and share intelligence and engage with victims while working to unmask those committing malicious cyber activities, wherever they are.

How many dealers does CDK have? ›

Trusted by nearly 15,000 dealer locations, CDK Global connects you to world-class dealership software solutions that work together to help you reach your potential.

What is the market share of CDK? ›

CDK Global has market share of 3.69% in automobile-dealership-management market.

Who is the largest auto distributor? ›

Bosch continues to be the world's largest automotive supplier, and Denso remains the world's second largest. Next in line are ZF, Hyundai Mobis, and Magna. On the other hand, CATL moved up to sixth place in FY2022 due to increased battery demand.

What is CDK in the automotive industry? ›

CDK is a technology company with a singular focus. Our priority is to make it easier for dealerships of all types to excel, and we do it by developing integrated technology that delivers.

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