AutoNation, a major U.S. auto retailer, stated that the outage was disruptive and negatively impacted its business. However, its locations remain operational, continuing to sell, service, and purchase vehicles.
On Monday, U.S. auto dealers were dealing with a prolonged software outage caused by a cyber attack, with some reverting to manual paperwork while CDK, the technology provider serving over 15,000 retail locations, worked to restore its systems.
The outage affecting CDK’s dealer management system—which is used for completing deals, tracking store profitability, and monitoring employee compensation—has “thrown the auto retail industry into disarray,” according to JPMorgan analysts last week.
AutoNation, a major U.S. auto retailer, reported that the outage was disruptive and negatively impacted its business, though its locations remain open and continue to sell, service, and buy vehicles.
Lithia Motors also reported disruptions in its CDK-hosted system in North America on Monday, noting that the incident is likely to negatively affect its business operations until the systems are fully restored.
Jim Seavitt, owner of Village Ford in Dearborn, Michigan, mentioned that while sales have not been affected, the process of delivering cars to customers has become more cumbersome. Although his dealership sold nearly 100 cars during a large sale last week, the vehicles are in limbo because CDK generates the necessary paperwork.
Seavitt expects the paperwork to be completed this week after his team devised alternative methods. CDK has informed him that services might remain down until mid-week.
“We don’t want to see this thing drag on,” Seavitt said.
CDK, which reported the outage last week, stated on Monday that it had begun the restoration process and reiterated that it will take several days to complete.
AutoNation and Group 1 Automotive reported that they are using alternative methods, such as manual paperwork, to keep their operations running. Both companies have also taken steps to safeguard their data.
Group 1 stated, “The timing for the restoration of other affected CDK applications remains uncertain at this point.”
Bloomberg News reported on Friday that a group of hackers, who claimed responsibility for the attack on CDK’s software systems, demanded millions of dollars in ransom to halt the hack.
Seavitt expressed hope that CDK would pay the ransom so dealers can return to normal operations.
While auto retailers have not specified any sales declines, analysts have noted potential impacts. Citi analysts mentioned, “We observe some potential risk to late-June (U.S. auto sales) volumes due to the reported CDK dealer disruptions,” in a note last week.
Auto retailer Sonic Automotive also indicated last week that the CDK outage is expected to negatively affect its business operations until the systems are fully restored.