One of the largest software and technology providers to the automotive industry, CDK Global, suffered a cyberattack that forced automakers operating in the United States to record their finances manually on paper sheets, in order to submit their monthly and quarterly closings before June 30.
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The company that supplies vehicle dealers such as Ford, General Motors, Volkswagen and Honda indicated that CDK systems first stopped working on the morning of June 19 and some functions began operating the same day in the afternoon, according to a Bloomberg News report.
However, on June 25, CDK Global said it does not expect the current disruption caused by the cyberattack on its dealer management software to be restored before the end of the month.
“The automotive industry software and technology provider would not be able to get all dealerships up and running by June 30 and asked them to make alternative plans for their month-end financial close processes,” according to the memo CDK sent. to the dealers and to which Reuters had access.
This situation has forced some car dealerships to return to manual paperwork, while the company works to restore the systems used by more than 15,000 retail establishments.
The cyberattack has affected about half of Volkswagen dealerships and about 60 percent of Audi automakers in the United States, according to a source familiar with the matter.
Honda, Toyota and Hyundai said they were monitoring the situation to understand the impact of the outage.
Honda added that it has directed dealers affected by the outage to use alternative tools and processes that will allow them to continue conducting business while CDK systems remain offline.
“We are aware of a CDK outage. We are currently assessing any impact to our Ford dealerships,” Ford Motor said. General Motors and BMW did not respond to Reuters’ requests for comment.
“We continue to conduct extensive testing on all other applications and will provide updates as we bring them back online,” CDK said in an emailed statement to Reuters.
Investment firm Brookfield Business Partners bought CDK in April 2022 for $6.41 billion, becoming the last major publicly traded software provider for auto dealers and manufacturers.
Bloomberg News reported that a group of hackers claiming responsibility for a cyberattack on CDK software systems have demanded millions of dollars in ransom to end the attack.
IMPACT ON SALES
New vehicle sales in the United States are expected to fall in June from a year earlier, hurt by the service disruption caused by the cyberattack on CDK Global, according to a joint report by industry consultancy JD Power and GlobalData.
Total new vehicle sales by June 2024, including both retail and non-retail transactions, are expected to reach between 1.33 and 1.27 million units, a decrease of 2.6 percent and 7.2 percent from the previous year.
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“Due to the disruption to dealer software systems, June sales will not reflect actual consumer demand for new vehicles,” said Thomas King, president of JD Power’s data and analytics division.
However, the CDK outage will not impact overall demand in the long term. Sales will be delayed, but most will likely occur in July, soon after the situation is rectified and sales are made despite the system disruptions, King added.
2024-06-29 09:00:00
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