NEW YORK (AP) — Car dealerships in North America are still wrestling with major disruptions that started last week with cyberattacks on a company whose software is used widely in the auto retail sales sector.
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 Wednesday. That led to an outage that has continued to impact operations.
For prospective car buyers, that’s meant delays at dealerships or vehicle orders written up by hand. There’s no immediate end in sight, but CDK says it expects the restoration process to take “several days” to complete.
On Monday, Group 1 Automotive Inc., a $4 billion automotive retailer, said it is using “alternative processes” to sell cars to its customers. Lithia Motors and AutoNation, two other dealership chains, also disclosed that they implemented workarounds to keep their operations going.
Here is what you need to know.
What is CDK Global?
CDK Global is a major player in the auto sales industry. The company, based just outside of Chicago in Hoffman Estates, Illinois, provides software technology to dealers that helps with day-to-day operations — like facilitating vehicle sales, financing, insurance and repairs.
CDK serves more than 15,000 retail locations across North America, according to the company.
What happened last week?
CDK experienced back-to-back cyberattacks on Wednesday. The company shut down all of its systems after the first attack out of an abundance of caution, according to spokesperson Lisa Finney, and then shut down most systems again following the second.
“We have begun the restoration process,” Finney said in an update over the weekend — noting that the company had launched an investigation into the “cyber incident” with third-party experts and notified law enforcement.
“Based on the information we have at this time, we anticipate that the process will take several days to complete, and in the interim we are continuing to actively engage with our customers and provide them with alternate ways to conduct business,” she added.
In messages to its customers, the company has also warned of “bad actors” posing as members or affiliates of CDK to try to obtain system access by contacting customers. It urged them to be cautious of any attempted phishing.
The incident bore all the hallmarks of a ransomware attack, in which targets are asked to pay a ransom to access encrypted files. But CDK declined to comment directly — neither confirming or denying if it had received a ransom demand.
“When you see an attack of this kind, it almost always ends up being a ransomware attack,” Cliff Steinhauer, director of information security and engagement at the National Cybersecurity Alliance. “We see it time and time again unfortunately, (particularly in) the last couple of years. No industry and no organization or software company is immune.”
Are impacted dealerships still selling cars?
Several major auto companies — including Stellantis, Ford and BMW — confirmed to The Associated Press last week that the CDK outage had impacted some of their dealers, but that sales operations continue.
In light of the ongoing situation, a spokesperson for Stellantis said Friday that many dealerships had switched to manual processes to serve customers. That includes writing up orders by hand.
A Ford spokesperson added that the outage may cause “some delays and inconveniences at some dealers and for some customers.” However, many Ford and Lincoln customers are still getting sales and service support through alternative routes being used at dealerships.
“The people who’ve been around longer — you know, guys who have maybe a little salt in their hair like me — we remember how to do it before the computers,” said John Crane of Hawk Auto Group, a Westmont, Illinois-based dealership operator that uses CDK. “It’s just a few more steps and a little bit more time.”
Although impacted Hawk Auto dealerships are still able to serve customers by “going back to the basics,” Crane added that those working in administration are still “pulling out our hair.” He notes that there are now stacks of paper awaiting processing — in place of orders that went through automatically on a computer overnight.
Group 1 Automotive Inc. said Monday that the incident has disrupted its business applications and processes in its U.S. operations that rely on CDK’s dealers’ systems. The company said that it took measures to protect and isolate its systems from CDK’s platform.
In regulatory filings, Lithia Motors and AutoNation disclosed that last week’s incident at CDK had disrupted their operations as…
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