US auto dealers hit by CDK software outage amid cyber attack

A significant cyber attack on CDK Global’s software systems has disrupted operations for more than 15,000 retail locations across North America, impacting several major U.S. auto dealers. CDK Global provides essential software solutions to the automotive retail industry, and its outage has caused widespread operational challenges.

CDK Global cyber security

CDK Global says its cybersecurity solutions provide a three-tiered cybersecurity strategy to prevent, protect and respond to cyberattacks so you can defend dealership.

AutoNation, one of the largest auto retailers in the U.S., reported that the outage has adversely affected its business, although its outlets remain open for selling, servicing, and buying vehicles. “As the incident is ongoing, the full scope, nature, and impact of the incident is not yet known,” AutoNation stated.

Peer auto retailer Group 1 Automotive has also been affected. Both companies have resorted to using manual processes to continue their operations and have taken precautionary steps to protect their data. “The timing of the restoration of other impacted CDK applications remains unclear at this time,” Group 1 said in a statement.

The cyber attack on CDK’s systems was reportedly accompanied by a ransom demand from the hackers, who have asked for millions of dollars to cease the attack, Bloomberg News reported on Friday.

Analysts are monitoring the situation closely. While auto retailers have not yet quantified any sales hit, there are concerns about potential impacts on late-June U.S. auto sales volumes due to the CDK dealer disruptions. “We note some potential risk to late-June (U.S. auto sales) volume from the reported CDK dealer disruptions,” Citi analysts indicated in a note last week.

Sonic Automotive has also flagged the CDK outage as likely to negatively impact its business operations until the systems are fully restored.

Meanwhile, Penske Automotive reported that its Premier Truck Group business has implemented business continuity plans in response to the outage, Reuters news report said.

As CDK Global works to restore its systems, the full extent and repercussions of the cyber attack remain uncertain, with auto dealers continuing to grapple with the operational challenges it has caused.

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