North American car dealers turn to pens, paper after cyberattacks

NEW YORK (AP) – North American auto dealers continue to struggle with major disruptions that began last week with cyberattacks on a software company widely used in the auto retail sector.

CDK Global, a company that provides software to thousands of car dealers in the US and Canada, was hit by cyber attacks on Wednesday. This led to an outage that has continued to affect operations.

For potential car buyers, this means delays at dealerships or handwritten vehicle orders. There is no immediate end in sight, with CDK saying it expects the restoration process to take “several days” to complete.

On Monday, Group 1 Automotive Inc., a $4 billion auto retailer, said it continued to use “alternative processes” to sell cars to its customers. Lithia Motors and AutoNation, two other dealer chains, also revealed that they implemented solutions to continue their operations.

Here’s what you need to know.

What is CDK Global?

CDK Global is a major player in the car sales industry. The company, based outside of Chicago in Hoffman Estates, Illinois, provides software technology to dealers that helps with day-to-day operations – such as 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 cyber attacks on Wednesday. The company shut down all of its systems out of an abundance of caution, spokeswoman Lisa Finney said last week.

“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 meantime we are continuing to actively engage with our customers and offer them alternative ways of doing business,” she added.

In messages to its customers, the company also warned of “bad actors” posing as CDK members or associates to try to gain access to the system by contacting customers. He urged them to be wary of any phishing attempts.

The incident had 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 nor denying whether it had received a ransom demand.

Are affected dealers still selling cars?

Several major auto companies — including Stellantis, Ford and BMW — confirmed to The Associated Press last week that the CDK outage had affected some of their dealers, but that sales operations are continuing.

In light of the ongoing situation, a spokesperson for Stellantis said on Friday that many retailers had switched to manual processes to serve customers. This includes writing orders by hand.

A Ford spokesman added that the outage could cause “some delays and inconvenience at some dealers and for some customers.” However, many Ford and Lincoln customers are still receiving sales and service support through alternative channels used at dealerships.

Group 1 Automotive Inc., which owns 202 auto dealerships, 264 franchises and 42 collision centers in the U.S. and U.K., said Monday that the incident has disrupted its applications and business processes at its U.S. operations that rely on the systems. of CDK traders. . The company said it has taken measures to protect and isolate its systems from the CDK platform.

All Group 1 dealers in the U.S. will continue to conduct business using alternative processes until CDK’s merchant systems are available, the company said Monday. Group 1 dealerships in the UK do not use CDK dealer systems and are not affected by the incident.

In regulatory filings, Lithia Motors and AutoNation disclosed that last week’s incident at CDK had disrupted their operations as well.

Lithia said it activated cyber incident response procedures, which included “disrupting business service connections between the company’s systems and CDK.” AutoNation said it also took steps to protect its systems and data – adding that all of its locations remain open “albeit at lower productivity” as many are serviced manually or through alternative processes.

With many details of the cyber attacks still unclear, customer privacy is also top of mind – especially with little knowledge of what information may have been compromised this week.

In a statement last week, Mike Stanton, president and CEO of the National Automobile Dealers Association, said “dealers are very committed to protecting their customers’ information” and were seeking updates from CDK to determine the extent of the impact. “so that they can respond appropriately.”

Cybersecurity experts have emphasized that consumers connected to CDK (or a CDK-connected agency) should assume that their data may have been breached. Those affected should monitor their credit – or even consider it freezing their credit as an extra layer of protection – and be wary of any suspicious phishing messages.