CDK Global says DMS restoration likely days away, not weeks

As dealers enter the sixth day of severe system outages from software provider CDK Global, restoration efforts have begun, but sources tell CDG News dealers won’t see any changes today. 

The good news: CDK says that restoration will take days to complete, but declined to provide an exact date. "We are continuing to actively engage with our customers and provide them with alternate ways to conduct business," CDK said in an emailed statement sent on June 23.

The bad news: Cybersecurity expert Yaron Rosen, CEO of FUSE Autotech, believes restoration of full services will realistically take a while to achieve.

“In my experience, a hack this size takes weeks to recover from. I can’t believe it will come back in days. I think it’s wishful thinking,” he said.

Backing up: Early in the morning on June 19, CDK sent an email to its dealership clients alerting them that a “cyber incident” had occurred. The company then shut down all its systems to safeguard customer data, leaving dealerships without the vital technology they need to execute sales and service.

After restoring some of its services, not including the DMS, a second cyber incident occurred overnight, leading to another service-wide shutdown. Later in the day on June 20, CDK announced that the shutdown would likely last “several days.”

Why it matters: The DMS is a dealership’s “brain.” It provides crucial services to stores and enables them to make sales and complete service orders much more efficiently than manual entry. Without it, some dealerships have ceased operations altogether, while many have found innovative and even old-school ways to keep business moving forward. 

What’s more: CDK software is used by over 15,000 dealers nationwide. That is more than half the number of all U.S. dealerships. A long-term disruption could even have an impact on the U.S. GDP, of which automotive sales comprise 3% to 3.5%.

Held for ransom: CDK is reportedly preparing to pay tens of millions of dollars to a criminal group based in Eastern Europe claiming responsibility for the attack.

The bigger picture: CDK's security issues highlight a recent spike in cyberattacks targeting auto companies. Data breaches are rising everywhere, but the car industry has seen a particularly high number of attacks in the past year, including one last week at Findlay Automotive Group.

Bottom line: Dealers are extremely resilient entrepreneurs who know how to find solutions and continue pushing forward. Dealers and vendors have banded together to share best practices and offer their services at no charge.

The million-dollar question: Will the automotive retailing industry continue centralizing technology after these events, or will dealers start to seriously rethink their tech stacks?

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