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.

What's going on with CDK? ›

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. Cars sit on a Chevrolet dealership's lot on June 20, 2024 in Chicago, Illinois.

How many dealers are on CDK? ›

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

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.

Who bought out CDK? ›

Last April it was announced that CDK Global, Inc., was being acquired by Brookfield Business Partners for $8.3 billion. Under merger agreement terms, CDK shareholders were said to receive $54.87 per share in cash upon completion of the transaction.

Who owns CDK Automotive? ›

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.

Is CDK owned by ADP? ›

As part of the spinoff, ADP stockholders received one share of CDK Global for every three shares of ADP common stock they held on the record date of September 24, 2014. CDK Global is now an independent, publicly-traded company in which ADP retains no ownership interest.

Who is the largest car dealer in the US? ›

Penske Motor Group's flagship dealership is Longo Toyota in El Monte, California, the largest car dealership in the world at over 50 acres (200,000 m2).

What dealer group has the most dealerships? ›

Top 50 Dealership Groups in the U.S.
  • Hendrick Automotive Group – 96 dealerships.
  • Lithia Motors Inc. ...
  • Sonic Automotive Inc. ...
  • Prime Automotive Group – 57 dealerships.
  • Ken Garff Automotive Group – 50 dealerships.
  • Suburban Collection – 45 dealerships.
  • #1 Cochran Automotive – 23 dealerships.
  • Holman Automotive Group Inc.
Jan 25, 2020

Who are the CDK hackers? ›

The cybercriminals behind the CDK attack are linked to a group called BlackSuit, Bloomberg reported on Monday, citing Allan Liska of computer security firm Recorded Future. In a June 21 story, the media outlet also said the hackers were demanding tens of millions of dollars and that CDK planned to pay the ransom.

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 is a CDK hack? ›

CDK, which provides software to car dealerships, was hit by a ransomware attack orchestrated by the BlackSuit group. Dealerships across the country were left unable to manage daily operations, with sales operations heavily affected.

What is CDK and why is it down? ›

Austin, Texas-based CDK, a provider of software used by 15,000 dealerships, shut down most of its systems after the cyberattacks struck on June 18 and 19. CDK provides SaaS-based CRM, payroll, finance and other key functions for dealerships.

What is CDK? ›

CDK Global, a company that provides software for thousands of auto dealers in the U.S. and Canada, was hit by back-to-back cyberattacks last week.

What happens to my CDK Global stock? ›

Under the terms of the merger agreement, Brookfield will commence a tender offer to acquire all of the outstanding shares of CDK. CDK shareholders will receive $54.87 per share in cash upon completion of the transaction, which represents a 30% premium to the unaffected closing price of CDK stock on Feb.

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