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)


Is CDK back online? ›

CDK Global says 'substantially all' dealers are back online after a crippling hack. CDK Global said “substantially all” of the nearly 15,000 car dealerships that use its software across North America are back online to its core management system, almost two weeks since a cyber incident caused a software blackout.

How many dealerships use 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.

What is a CDK outage? ›

In this incident, CDK Global was infected with ransomware taking many of its core systems offline. As CDK Global is a trusted provider of software services to many organizations in the automotive industry, the ransomware impact was widespread.

What does CDK do for car dealerships? ›

CDK offers cloud-based software to more than 15,000 auto dealerships across North America that manages vehicle acquisitions, sales, financing, insuring, repairs and maintenance.

Has the CDK hack been resolved? ›

It expects operations to be restored soon. CDK said its customer care channels have been restored and it was "actively working" to bring other applications live. The company last week said it brought two small groups and one large publicly traded group of auto retailer live on its system as part of a phased approach.

What company spun off CDK Global? ›

Longtime client Automatic Data Processing, Inc. (ADP) completed the distribution to its stockholders of all of the issued and outstanding common stock of CDK Global, Inc. in a tax-free spin-off.

Who bought out CDK? ›

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. The deal offered CDK investors $54.87 for each share held, representing a 30% premium. Brookfield completed the deal on July 6, 2022.

What company owns the most dealerships? ›

In comparison, Lithia Motors has continuously expanded its dealership network without falter since 2014, acquiring 32 locations in 2022 alone. With over 290 storefronts, it now claims to have surpassed AutoNation in size, making it the biggest dealer group in the U.S.

Who is the largest auto distributor? ›

Bosch continues to be the world's largest automotive supplier, and Denso remains the world's second largest. Next in line are ZF, Hyundai Mobis, and Magna. On the other hand, CATL moved up to sixth place in FY2022 due to increased battery demand.

What is a nested outage? ›

A "nested outage" happens when power is restored to equipment serving your area, but your home is impacted by a more localized issue that is still causing an outage.

Which dealerships use CDK Global? ›

Five of the six — Asbury Automotive Group, AutoNation, Group 1 Automotive, Lithia Motors and Sonic Automotive — use CDK as their primary DMS provider. Penske Automotive Group said it does not use CDK's DMS at franchised dealerships in the U.S. or the U.K. but does for its Premier Truck Group.

Did CDK pay ransom? ›

CDK has not disclosed whether or not it has paid the group behind the ransom attack, but said it has been successful in slowly restoring automated sales tools for its dealership clients.

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.

What does a dealership management system do? ›

A DMS is a software platform that dealerships and service shops use to manage their day-to-day operations. These systems provide tools for different areas of your dealership. More commonly this includes tools for finance, sales, vehicle inventory, customer information management and credit reports.

Can I log into CDK from home? ›

We don't want you to have to worry about getting access to important information and workflows in your CDK Drive DMS. That's why we're pleased to announce a new Remote Worker solution that provides you with secure access to your DMS from home or other remote locations with an internet connection.

Did CDK pay the ransom? ›

CDK has not disclosed whether or not it has paid the group behind the ransom attack, but said it has been successful in slowly restoring automated sales tools for its dealership clients.

Who competes with CDK? ›

Top Competitors and Alternatives of CDK Global

The top three of CDK Global's competitors in the Automobile Dealership Management category are FlickFusion with 40.49%, Dealertrack with 22.17%, Reynolds and Reynolds with 14.17% market share.


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