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CDK Expects Systems Back Up For All Dealers By July 4th

A cyberattack against CDK Global last month resulted in a nationwide shutdown of the company’s dealer management system (DMS) services, heavily impacting auto dealers, including GM brands. The DMS provider serves nearly 15,000 dealership locations. Now, a new report indicates that CDK expects services to be restored for all dealers by midweek.

CDK Global expects DMS services to be restored to dealers by this week following a significant cyberattack.

According to a report from Reuters, the DMS provider has stated that it anticipates all dealers to be live on its services by late Wednesday, July 3rd, or early on the morning of Thursday, July 4th. “We are continuing our phased approach to the restoration process and are rapidly bringing dealers live on the dealer management system,” the company said, per Reuters.

The phased restoration process has so far included two small groups and one large publicly traded group of auto retailers. Meanwhile, some dealers have reverted to manual paperwork in the wake of the cyberattack, which has caused significant operational disruptions. Second-quarter U.S. auto sales are expected to take a hit as a result of the attack.

The cyberattack was initially reported on June 19th and affected various products, including CDK Service, DRIVE, Foretells, and Modern Retail CRM. Last week, reports surfaced that hackers were demanding a ransom, with an unidentified source indicating that the hacker group responsible was demanding tens of millions of dollars.

According to a report from Automotive News, which cites a study from Anderson Economic Group, the CDK Global outage is expected to cost auto dealers around $1 billion if the shutdown lasts until July 4th. The timing of the attack was particularly detrimental as dealers were aiming to make an end-of-quarter sales push.

The DMS industry is highly consolidated, with dealers forced to select from a relatively limited number of DMS service providers. As such, the CDK Global cyberattack has had a particularly impactful effect on U.S. auto dealers.

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Jonathan is an automotive journalist based out of Southern California. He loves anything and everything on four wheels.

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Comments

  1. Who knows how long it’ll take for Q2 sales data to be recorded. Sounds to me like CDK is fussing over paying the ransom, so it could be longer.

    Reply
    1. I thought it was well know to not pay ransoms. It just encourages more ransoms. I get it is painful to actually do the work and restore the systems, and it is difficult to spend the money to actually lock stuff down, but in the end it is much less expensive than paying ransoms.

      Reply
  2. How will CDK compensate their dealers?

    Reply
  3. My local dealer lost me as a customer because they wouldn’t sell me an oil filter! Come on when in business you need to adapt to some sort of backup plan.

    Reply
    1. You have to wonder why they even unlocked the doors and answered the phone. Why not just put up a sign on the door that says closed until further notice and change the recording when you call to say they are sorry, but currently closed for cyberattack. I remember a time if a store had a power outage they’d do a hand transaction cash or credit. Even credit, remember those sliding things that would make an imprint of the CC onto a triplicate carbon backed slip. We have become helpless.

      Reply
  4. Weasel words like “Expects” means “nobody has a clue”.

    Reply

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