North American car dealerships are returning to using pens and paper after cyberattacks

NEW YORK (AP) — North American auto dealers continue to grapple with major disruptions that began last week with cyberattacks on a software company widely used in the auto retail sector.

CDK Global, a company that provides software to thousands of auto dealers in the United States and Canada, was hit by successive cyberattacks on Wednesday. This led to a power outage that continued to impact operations.

For potential car buyers, this means delays at dealerships or handwritten vehicle orders. There's no immediate end in sight, with CDK saying it expects the restoration to take “several days” to complete.

Group 1 Automotive Inc., a $4 billion auto retailer, said Monday that it continued to use “alternative processes” to sell cars to its customers. Lithia Motors and AutoNation, two other dealer chains, also revealed they have implemented workarounds to keep their operations running.

Here is what you need to know.

What is CDK Global?

CDK Global is a major player in the automobile sales industry. The company, based outside Chicago in Hoffman Estates, Illinois, provides software technology to dealers that helps with day-to-day operations — such as facilitating vehicle sales, financing, insurance and repairs.

CDK serves more than 15,000 retail locations across North America, according to the company.

What happened last week?

CDK faced successive cyberattacks on Wednesday. Company spokeswoman Lisa Feeney said last week that the company shut down all of its systems out of an abundance of caution.

“We have begun the recovery process,” Feeney said in an update over the weekend, noting that the company had begun an investigation into the “cyber incident” with outside experts and notified law enforcement.

“Based on the information we have at this time, we expect the process to take several days to complete, and in the meantime we continue to actively engage with our customers and provide them with alternative ways of doing business,” she added.

In messages to its customers, the company also warned of “bad actors” posing as CDK members or affiliates to try to gain access to the system by contacting customers. She urged them to be wary of any phishing attempt.

The incident has all the hallmarks of a ransomware attack, where targets are asked to pay a ransom to access encrypted files. But CDK declined to comment directly, and would neither confirm nor deny whether it had received a ransom demand.

Are affected dealers still selling cars?

Several major auto companies — including Stellantis, Ford and BMW — confirmed to The Associated Press last week that the CDK outage affected some of their dealerships, but sales operations are continuing.

In light of the ongoing situation, a Stellantis spokesperson said Friday that many agents have turned to manual processes for customer service. This involves typing commands manually.

A Ford spokesman added that the outage may cause “some delay and inconvenience to some dealers and some customers.” However, many Ford and Lincoln customers still obtain sales and service support through alternative methods used at dealerships.

Group 1 Automotive, which has 202 auto dealerships, 264 franchises and 42 collision centers in the U.S. and U.K., said Monday that the incident disrupted its applications and business processes at its U.S. operations that rely on CDK dealer systems. . The company said it had taken measures to protect its systems and isolate them from the CDK platform.

All Group 1 dealers in the United States will continue to do business using alternative operations until CDK dealer systems are available, the company said Monday. Group 1 dealers in the UK do not use CDK dealer systems and are not affected by the incident.

In regulatory filings, Lithia Motors and AutoNation revealed that last week's accident at CDK also disrupted their operations.

Lithia said it activated cyber incident response procedures, which included “cutting business service communications between the company’s systems and CDK.” AutoNation said it has also taken steps to protect its systems and data, adding that all of its sites remain open “despite reduced productivity,” with many being served manually or through alternative processes.

With many details of cyberattacks still unclear, customer privacy is also a top priority – especially with not much known about what information may have been compromised this week.

In a statement last week, Mike Stanton, president and CEO of the National Automobile Dealers Association, said that “dealers are very committed to protecting their customers' information” and were seeking updates from CDK to determine the scope of the impact “so they can respond appropriately.” “

Cybersecurity experts stressed that consumers contacting CDK (or a CDK-affiliated agent) should assume that their data may have been compromised. Those affected should watch their credit – or even consider it Freeze their credit As an extra layer of defense – and be wary of any suspicious phishing messages.