“Everything Is Frozen”: Third-Day Of Cyberattack Leaves 15,000 Auto Dealerships Crippled

Over 15,000 auto dealerships nationwide face major disruptions due to an ongoing cyberattack for the third day, shutting down their backend management systems. This has halted sales for some dealers and forced others to complete transactions the old-fashioned way: by hand. 

CDK Global, the leading provider of dealership management systems and digital retailing solutions, said cybersecurity breaches began on Tuesday. By Wednesday afternoon, CDK’s core systems were restored, only to be shuttered on Thursday after a second hack attack. This has made it nearly impossible for thousands of dealers to buy and sell vehicles this week.

“We cannot process paperwork. Everything is frozen, everything is tied up — we cannot move money back and forth to pay off cars, to finance our customers’ transactions,” Tom Maioli, who owns Celebrity Motor Car Company with dealerships across  York and New Jersey, told CBS MoneyWatch. He said his business is “completely shut down.”

Maioli continued, “We cannot process paperwork. Everything is frozen, everything is tied up — we cannot move money back and forth to pay off cars, to finance our customers’ transactions.”

Consumers are being greeted with signs like this at auto dealers nationwide…

One of the largest Chevrolet dealers in South Carolina closed. On a Friday.

Unheard of.

Day 3 of the CDK outage.

(via @bradsales312) pic.twitter.com/1SqzsAxUdi

— Car Dealership Guy (@GuyDealership) June 21, 2024

On Thursday, X user Car Dealership Guy was featured on CNBC. He said the auto industry’s biggest question after all of this chaos is: “Will the industry continue centralizing and consolidating technology? This has been the biggest trend in auto retail.” 

“It’s disrupting the entire dealership [industry],” says @GuyDealership‘s Yossi Levi after a cyberattack hit 15,000 auto dealerships across the country. “Will the industry continue centralizing and consolidating technology? This has been the biggest trend in auto retail.” pic.twitter.com/oRTMYyPMfX

— Last Call (@LastCallCNBC) June 20, 2024

Such disruptions have forced back-office support staff to write orders and complete paperwork without computers (clearly first-world problems).

“My selling team can hand-write a buyer’s order,” Brian Benstock, general manager of Long Island City-based Paragon Honda and Paragon Acura dealership, told CNN.

There have been no reports (yet) of foreign adversaries involved in the cyber breach. Also, CDK has provided no timeline for when core systems will be restored.

A lingering concern is the economic fallout from this cyber incident, given the size of the auto industry’s size.