Cyber attack on CDK disrupts operations for auto dealerships

Several automobile dealerships in the United States are grappling with operational challenges following a cyber attack on technology and software provider CDK Global, now entering its second day.

CDK Global cyber security

A BMW North America spokesperson confirmed the widespread impact, stating, “The CDK outage is impacting automotive dealerships across the U.S. and Canada, including a portion of BMW Group dealers.” There are 366 BMW dealerships in the United States as of May 20, 2024.

CDK, a key software supplier to auto dealers and manufacturers, reported experiencing a cyber incident on Wednesday, prompting the shutdown of most of its systems. The company is actively working to restore its services to enable dealers to resume normal operations. Despite this, CDK has not disclosed the exact number of dealerships affected. According to its website, CDK collaborates with over 15,000 retail locations throughout North America.

Cyber security professionals are waiting for immediate action from CDK. The software provider may be forced to offer ransomware. Some pages of the website of CDK Global is not working at present.

The incident underscores the growing cybersecurity risks in the automotive retail sector. CDK’s 2023 State of Cybersecurity in the Dealership Study revealed that 17 percent of automotive retailers faced a cyber attack or incident in the past year.

What is the market size of Automotive Cyber Security Market?

Automotive cyber security market size is forecast to grow from $2.91 billion in 2022 to $11.17 billion by 2030, at a CAGR of 21.2 percent during the forecast period (2023-2030), according to SkyQuest Technology.

A dealer who received a communication from CDK mentioned that the company indicated it might take several more days to restore full system functionality. This prolonged outage has left dealers seeking clarity.

“Dealers are very committed to protecting their customer information and are actively seeking information from CDK to determine the nature and scope of the cyber incident so they can respond appropriately,” the National Automobile Dealers Association (NADA) commented.

Recently, NADA has announced its partnership with Authenticom, a leading data management services provider, for a secure platform for dealerships to syndicate their data among vendors, customers and manufacturers.

Using Authenticom’s DealerVault platform, the technology pulls data from thousands of data management systems worldwide and consolidates it into one secure source. This allows dealerships to manage their vendor and manufacturer relationships with only the data required for each interaction, keeping customer data safe.

As CDK continues to address the cyber incident, auto dealers across North America are striving to mitigate the impact on their operations and protect their customer data.

The disruption has extended beyond software systems, with privately owned vehicle dealer Holman reporting that its phone system has also been affected.

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