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.


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)


What is a CDK outage? ›

A cyber attack on CDK Global, a software provider that helps dealerships manage sales and service, has crippled the workflow at approximately 15,000 dealerships across the United States and Canada.

How many dealers are on CDK? ›

CDK serves more than 15,000 retail locations across North America, according to the company.

What is the CDK cyber attack? ›

SAN FRANCISCO, June 27 (Reuters) - A hack into software maker CDK Global has disrupted operations at auto dealerships across the U.S., the latest in a series of hacks where ransom-demanding cybercriminals target big companies by breaching behind-the-scenes software suppliers.

What does CDK do for car dealerships? ›

Car dealerships use CDK's software to track what vehicles are on their lots, conduct credit checks, generate interest rates for auto loans and complete sales contracts, among other functions.

What is a nested outage? ›

If the status of your outage changes to complete, but your power is still out - please report your outage again to let us know. We refer to this as a "nested" outage and it occurs when there is additional damage to your circuit that was not identified or fixed by the repairs.

Who is attacking CDK? ›

A hacking group called BlackSuit is behind the cyberattack on CDK Global that's paralyzed car sales across the US, according to Allan Liska, a threat analyst at the security firm Recorded Future Inc.

What car dealerships are affected by cyber attacks? ›

Several major auto companies — including Stellantis, Ford and BMW — confirmed to The Associated Press Friday that the CDK outage had impacted some of their dealers, but that sales operations continue.

What is a cyberware attack? ›

Cyber warfare is usually defined as a cyber attack or series of attacks that target a country. It has the potential to wreak havoc on government and civilian infrastructure and disrupt critical systems, resulting in damage to the state and even loss of life.

What are Pharming attacks? ›

Pharming is an attack technique that manipulates the Domain Name System (DNS) to redirect a user's legitimate request to a fraudulent website without their knowledge.

What does CRM mean in car dealership? ›

An automotive CRM (customer relationship management) is a software solution that helps car companies with customer service, sales, and marketing.

How did a cyberattack take 15000 car dealers offline? ›

How did this all start? CDK's systems first went down around 2 a.m. Eastern time on June 19, on what otherwise would have been a busy day for dealers because of the Juneteenth national holiday. The company told its customers that it had experienced a cyber incident and had shut down a majority of its systems.

What's going on with CDK? ›

CDK Global, a software provider to some 15,000 car dealers, was waylaid by debilitating cyberattacks this week that have had a crippling effect on the auto sales industry. Cyberattacks seem to be more devastating than ever and taking targeted companies even longer to resolve.

What is CDK and why is it down? ›

What's happening: CDK Global, a data provider whose software is used by car dealerships to handle everything from records to scheduling, was hit by cyber attacks on June 19 that caused the company to shut down most of its systems.

What is the CDK system? ›

CDK Global, the company that powers sales for thousands of car dealerships across the U.S., says it has restored systems for a small group of dealers after it was hacked last week in what it later described as a "ransom event."

What is CDK service connect? ›

Service Connect is the FASTEST way for you to get CDK Support — AND it's much faster than the phone. There's no waiting on hold, trying to remember your CMF number or wading through endless prompts. There's so many great advantages of Service Connect, but here are the top 10 things you need to know.

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