A significant cyberattack on CDK Global, a crucial software provider for auto dealerships, has severely disrupted operations at thousands of dealerships across the United States and Canada. The attack, which occurred late on June 19, has rendered essential dealership software inoperative, causing substantial operational challenges during the busy summer car-buying season.

CDK Global, which provides software for over 15,000 retail locations in North America, confirmed the incident in a statement. "We are actively investigating a cyber incident," said CDK spokesperson Lisa Finney. "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."

This marks the second significant cyber incident for CDK Global in recent times. The company had to shut down most of its systems proactively to prevent further damage. "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," the statement continued.

CDK's software is integral to various dealership operations, including deal negotiations, service records, vehicle acquisitions, sales, financing, insuring, repairs, and maintenance. The outage has forced many dealerships to revert to manual processes. Some dealerships have resorted to using pen and paper to conduct sales and manage service records, a significant step back from their usual digital operations.

The disruption is particularly concerning given the peak summer car-buying season. Dealers worry that the outage could lead to lost sales as customers experiencing delays may turn to competitors. "This presents a significant inconvenience and potential loss of business for our dealerships. Customers experiencing delays in finalizing a purchase might opt to visit a nearby dealer without these issues and purchase a new vehicle there instead," said a dealer affected by the outage.

The cyberattack also impacts parts and service departments, further complicating dealership operations. "The outage isn't just affecting car sales but parts and service departments are also being disrupted," noted an industry observer.

CDK Global has managed to restore its core document management system and digital retailing solutions but continues to conduct extensive tests on other applications. "We are continuing to conduct extensive tests on all other applications, and we will provide updates as we bring those applications back online," Finney said.

This cyber incident highlights the growing threat posed by cybercriminals to auto dealerships. A 2023 report from CDK Global noted that 17% of 175 surveyed dealers experienced a cyberattack or incident within the past year, up from 15% the previous year. Of those affected, 46% reported a negative financial or operational impact.

Auto dealerships are particularly attractive targets for cybercriminals due to the vast amounts of sensitive customer data they hold, including credit applications and financial information. "Dealership systems are often interconnected to external interfaces and portals, such as external service providers," the report stated. Many dealerships also lack basic cybersecurity protections, making them vulnerable to such attacks.

The recent cyberattack against Findlay Automotive Group, which operates in five states, further underscores the vulnerability of the automotive sector. The attack restricted Findlay's ability to conduct sales and service, illustrating the widespread impact such incidents can have on dealership operations.

CDK Global's swift response and ongoing efforts to restore services are critical to mitigating the impact of this disruption. As dealerships navigate these challenges, the incident serves as a stark reminder of the importance of robust cybersecurity measures in protecting against the growing threat of cyberattacks.