‘Months to correct, if not years’: Car dealerships and customers feel the impact as CDK outage drags on | CNN Business (2024)

‘Months to correct, if not years’: Car dealerships and customers feel the impact as CDK outage drags on | CNN Business (1)

Cars sit on a Chevrolet dealership's lot on June 20, 2024 in Chicago, Illinois. A cyber attack on CDK Global, a software provider that helps dealerships manage sales and service, has crippled the workflow at approximately 15,000 dealerships across the United States and Canada.

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A CDK Global system outage has affected nearly every aspect of the Mazda dealership in Seekonk, Massachusetts, where Ryan Callahan is general sales manager. He says it won’t be a simple fix.

“The financial impact it will directly have on us will take months to correct, if not years,” Callahan said.

Car buyers and dealers are grappling with the shutdown of the retail software provider, which has left nearly 15,000 car dealerships across North America struggling to provide services to customers and scrambling to find temporary analog solutions to operate.

CDK says it’s working on restoring its systems and expects them to be back online in several days, but in the interim, customers and dealership employees remain beset by long wait times, delays – and missed chances to make or save money.

Tom McParland, the owner of AutoMatch Consulting, a national car buying service, said the outage was impacting customers because they have fewer dealers to choose from.

“It reduces their ability to get a deal,” he said. “It limits the customer’s leverage.”

Some dealers also can’t apply factory rebates without CDK’s software, so customers may miss out on money-saving deals. For customers looking to buy a car, McParland suggested casting a wide net and shopping outside their local market to find the best price.

‘They aren’t really able to drive their cars’

Midway Automotive uses a CDK product to register cars with the Massachusetts Registry of Motor Vehicles.

Owner Michael Deveney says that after the shutdown on Wednesday, the dealership started sending customers to their local RMV office in order to register their cars in person after purchase.

“That was up until Thursday. Then customers started being told that (the RMV) wasn’t taking any walk-ins,” he said. “They were probably getting flooded with customers and started turning people away.”

Deveney said one customer got increasingly agitated because he couldn’t register his car. “Getting an appointment might take three or four days, and in that time they aren’t really able to drive their cars,” he added.

Some 30 miles north in Lynn, Katelyn Salvato says she hasn’t been able to register a vehicle since last Tuesday. Salvato works as a title clerk for Pride Motor Group, registering cars for three dealerships.

“Today… I sent 21 registrations to be done manually at the Massachusetts RMV,” she said, adding that the RMV won’t accept transactions from dealership employees. “The transactions must be dropped off within the designated hours (of 10 am to 3 pm), and the runner can’t wait for them.”

Callahan echoed those concerns. Under normal circ*mstances, the CDK software allows the dealership to register a vehicle almost instantaneously, but now the process faces heavy delays.

“Our remote registration system is rendered useless without CDK to talk to it. We’ve had to send a runner with the registrations to the DMV to be competed in packs, costing several days where prior it took hours,” Callahan said in an interview with CNN.

If a vehicle isn’t registered within seven days of purchase, the state penalizes both the dealership and customers.

The Massachusetts Department of Transportation, which oversees the state’s RMV, has not responded to CNN’s request for comment.

Service and sales go analog

Salespeople and service employees who spoke with CNN say they’ve resorted to using pen and paper to process purchases, which has drawn out the amount of time it takes to buy a car, according to Scott Campbell, a salesman at Capital City Buick GMC in Berlin, Vermont. He estimates wait times have doubled or tripled.

Nicolas, who declined to provide his full name because he was unsure about his employer’s stance on speaking to the media, is a clerk in the parts department of a Porsche dealership in Los Angeles. He said he has been using “a mix of pen and paper, Excel sheets, and extra care for each invoice” since the shutdown.

Since many dealerships use CDK products to manage inventory, Nicolas said his department is now forced to manually record inventory parts, which slows their work down significantly. “We don’t have clear view of stock and have to do regular inventory on our most used parts,” he added.

But sometimes the analog workarounds are not enough.

Delays at dealerships

Several buyers and repair customers tell CNN they’ve experienced long delays.

Don Ayco*ck told CNN he drove 90 miles round-trip from his home to a car dealership in Clay County, Florida, to buy a new Buick on Thursday, a day after the CDK shutdown. He told CNN he was able to buy the car but was unable to sign the title.

“We got a call from them today that we can come next Thursday to sign the paperwork for the title and get a permanent license plate,” he said, noting that it will be another lengthy round-trip drive.

In San Diego — where temperatures in recent days have been pushing 90 degrees — Robbie Jacob and his wife tried to make an appointment at a Kia service center to fix their car’s broken air conditioning unit. Jacob said the center told them it was unable to service the car, citing the CDK cyber incident, as there were no appointments available and all walk-ins were suspended until next week.

Other software providers take note

CDK Global isn’t the only management system used by dealerships, and the back-to-back cyber incidents affecting the company have put their competitors on high alert, as well.

Cox Automotive, which operates the Dealertrack and VinSolutions software systems to manage documents and customer service, told CNN that it temporarily stopped integrating its systems with CDK after the outage “as a precautionary measure to prioritize safety and security for our clients.”

“While actively supporting our customers to continue to run their business, we established a secure microsite that our customers are actively using now to access support and guidance, work-arounds and actions they can take while CDK systems are not available,” the company said.

Tekion, another software company used by dealerships, said it has “seen an increase in inquiries from dealers in light of the recent CDK incident.”

And other industry experts told CNN that switching from one system to another is not an action that dealerships can just take on a whim. Businesses are often locked into a multi-year contract with a software provider. Switching software also means training employees, making it a lengthy process.

Meanwhile, Asbury Automotive Group, one of America’s largest care retailers and service providers, warned investors Monday that the CDK outage has hurt its business, and it’s unclear when it will end. Rival Group1 Automotive said CDK believed the outage would be resolved in days, not weeks, but it was unclear how much financial damage the company faced as a result.

A previous version of this article incorrectly stated the name of AutoMatch Consulting, a national car buying service.

CNN’s Nathaniel Meyersohn contributed to this reporting.

‘Months to correct, if not years’: Car dealerships and customers feel the impact as CDK outage drags on | CNN Business (2024)


‘Months to correct, if not years’: Car dealerships and customers feel the impact as CDK outage drags on | CNN Business? ›

The financial impact it will directly have on us will take months to correct, if not years,” Callahan said. Tom McParland, the owner of Automatch Consulting, a national car buying service, said the outage was impacting customers because they now have fewer dealers to choose from.

What does CDK do for car dealerships? ›

CDK offers cloud-based software to more than 15,000 auto dealerships across North America that manages vehicle acquisitions, sales, financing, insuring, repairs and maintenance.

What dealerships use CDK? ›

Five of the six — Asbury Automotive Group, AutoNation Inc., Group 1 Automotive Inc., Lithia Motors Inc. and Sonic Automotive Inc. — use CDK as their primary DMS provider.

What's going on with CDK? ›

Hackers took down CDK's sales and client management software tools two weeks ago, crippling the auto industry in what the company called a "ransom event."

Did CDK pay the ransom? ›

It is unclear whether CDK chose to pay the ransom, although one news outlet reported that they did.

What is a CDK outage? ›

In this incident, CDK Global was infected with ransomware taking many of its core systems offline. As CDK Global is a trusted provider of software services to many organizations in the automotive industry, the ransomware impact was widespread.

How much does CDK cost a dealership? ›

The outage would have cost care dealerships millions of dollars more if it stretched on. According to an estimate by Anderson Economic Group, CDK's system collapse could result in approximately $944 million in direct losses due to business interruptions for affected car dealers if the outage lasted a full three weeks.

Who bought out CDK? ›

On April 7, 2022, CDK Global agreed to be acquired by Brookfield Business Partners and institutional partners for a total enterprise value of $8.3 billion. The deal offered CDK investors $54.87 for each share held, representing a 30% premium. Brookfield completed the deal on July 6, 2022.

Who competes with CDK? ›

Top Competitors and Alternatives of CDK Global

The top three of CDK Global's competitors in the Automobile Dealership Management category are FlickFusion with 40.49%, Dealertrack with 22.17%, Reynolds and Reynolds with 14.17% market share.

Is CDK still down? ›

CDK Global said Tuesday that “substantially all” of the car dealerships it serves are back online, two weeks after the software maker was struck by a crippling ransomware attack.

Is CDK back up? ›

Software provider CDK Global says almost all auto dealerships in North America have returned online after back-to-back cyberattacks left hundreds offline.

Is CDK owned by ADP? ›

As part of the spinoff, ADP stockholders received one share of CDK Global for every three shares of ADP common stock they held on the record date of September 24, 2014. CDK Global is now an independent, publicly-traded company in which ADP retains no ownership interest.

What does the company CDK do? ›

CDK Global Inc (CDK) is a technology company that provides integrated technology and digital marketing solutions for automotive retailers and original equipment manufacturers (OEMs).

Who hacked CDK Global? ›

A hacking group called BlackSuit was behind the cyberattack on CDK Global that's paralyzed car sales across the US, according to Allan Liska, a threat analyst at the security firm Recorded Future Inc.

What is guaranteed to happen once a ransom has been paid? ›

Paying the ransom does not guarantee the encrypted files will be released; it only guarantees that the malicious actors receive the victim's money, and in some cases, their banking information.

What does ransom do to your computer? ›

Ransomware is a type of malware which prevents you from accessing your device and the data stored on it, usually by encrypting your files. A criminal group will then demand a ransom in exchange for decryption. The computer itself may become locked, or the data on it might be encrypted, stolen or deleted.

What does a dealership management system do? ›

A DMS is a software platform that dealerships and service shops use to manage their day-to-day operations. These systems provide tools for different areas of your dealership. More commonly this includes tools for finance, sales, vehicle inventory, customer information management and credit reports.

What is the role of a vehicle sales consultant? ›

The car salesperson assists customers who are looking to purchase a new or used vehicle. They converse with customers to find out their budget and wish list, helping them find a suitable car that matches their needs. In addition to selling cars, the car salesperson orders and arranges payments with the shipper.

What does CKD vehicles stand for? ›

CKD stands for Completely Knocked Down cars. These are vehicles that are shipped in parts and assembled at the dealership or factory. Conversely, CBU stands for Completely Built Units which are vehicles that are shipped in one piece and do not need to be assembled.

What does a retention manager do at a car dealership? ›

A retention manager's primary role is to ensure accounts are getting the value they're paying for and thus achieve their goals with the product or service, leading to increased customer stickiness and retention.

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