U.S. auto dealers grappled with a cyberattack-led software outage on Monday, forcing many to revert to manual paperwork as car industry technology provider CDK Global worked to restore systems used by more than 15,000 retail locations. The outage, affecting CDK’s dealer management system, is crucial for completing deals, tracking store profitability, and monitoring employee compensation, and has “significantly slowed down” the auto retail industry, according to Cliff Steinhauer of The National Cybersecurity Alliance.
An intelligence analyst at security firm Recorded Future reports that a hacking group called BlackSuit is reportedly behind the cyberattack on CDK. The company, which reported the outage last week, has not immediately confirmed BlackSuit’s involvement but stated that the restoration process will take several days to complete.
Despite the disruptions, market research firm Cox Automotive suggested that the impact might be less severe than initially feared, predicting that most sales would likely rebound in July. However, some large auto dealers have already flagged significant operational hits.
AutoNation, a leading U.S. auto retailer, reported that the outage has disrupted its business, though its outlets remain open, continuing to sell, service, and buy vehicles. Similarly, Lithia Motors experienced disruptions in its CDK-hosted system in North America, anticipating a negative impact on its business operations until full system restoration.
Jim Seavitt, owner of Village Ford dealership in Dearborn, Michigan, noted that while sales have not dampened, the delivery process has become more laborious. During a recent sale, his dealership sold nearly 100 cars, but the outage left those vehicles in limbo as CDK generated the paperwork for formal handover. Seavitt expects the cars to be transferred this week after his team developed alternative paperwork processes, with CDK indicating that services might be down until mid-week. “We don’t want to see this thing drag on,” Seavitt emphasized.
Other auto retailers, including Group 1 Automotive and Asbury Automotive, reported similar disruptions and have resorted to manual processes to conduct business while taking precautionary steps to protect their data. Group 1 noted the timing of the restoration of impacted CDK applications remains unclear. Asbury Automotive flagged a hit from the outage but could not confirm the full scope or whether any customer data was accessed.
Sonic Automotive also indicated that the CDK outage would negatively impact its operations until full system restoration. Bloomberg News reported that hackers claiming responsibility for the attack on CDK’s software systems have demanded millions of dollars in ransom. Village Ford’s Seavitt hopes CDK pays the ransom to resume normal business operations.
Citi analysts noted potential risks to late-June U.S. auto sales volume from the CDK dealer disruptions. According to data from industry consultants J.D. Power and GlobalData, total new vehicle retail sales in the U.S. reached 1.1 million units in June last year.
