Major cyberattack still hampering car dealerships
Summary
TLDRA cyberattack on CDK Global, a key software provider for US car dealerships, has significantly impacted sales operations, with some dealerships reporting a 50% drop in new car sales. The ransomware attack locked systems at around 15,000 dealerships, disrupting services from sales to warranty work. JD Power estimates a possible 5% decrease in June retail sales compared to the previous year. Despite the disruption, customers are advised to be patient or seek dealerships not using CDK Global's software, as the company aims to restore all systems by July 4th.
Takeaways
- 🚗 A cyber attack on CDK Global, a key software provider for car dealerships, has significantly impacted the ability of many US car dealerships to sell cars.
- 📉 JD Power estimates that the cyber attack may have caused a drop in June retail sales by more than 5% compared to the previous year.
- 🔒 The attack involved hackers holding the CDK Global system for ransom, affecting approximately 15,000 dealerships nationwide.
- 💰 The ransom demanded by the hackers was reportedly in the millions of dollars, as reported by Bloomberg.
- 📊 The DMS (Dealer Management System) targeted by the attack is crucial for linking together new and used vehicle sales, finance offices, and service departments.
- 🛠️ Consumers may face difficulties in getting routine services like oil changes and warranty work due to the system being locked.
- 📉 New car sales at one New Jersey Lexus dealership were reported to be down by 50% for the month due to the cyber attack.
- ⏱️ The lack of the usual fast software system has doubled the time required for dealerships to process sales and services.
- 💼 CDK Global has not confirmed whether the ransom was paid but is actively working on restoring the system for all dealers.
- 🎉 The company expects all dealer connections to be live by the morning of July 4th, aiming to resume normal operations in time for the holiday sales.
- 🛍️ Consumers looking to buy a car might consider dealerships that do not use CDK Global's software or wait until the system is restored post-holiday.
Q & A
What is the main issue faced by US car dealerships in the script?
-US car dealerships are struggling with the aftermath of a cyber attack on CDK Global, a key software provider, which has hampered their ability to sell cars.
How did the cyber attack impact June retail sales according to JD Power estimates?
-JD Power estimates suggest that the cyber attack may have caused June retail sales to drop by more than 5% compared to the previous year.
What is the name of the software provider that was targeted by hackers?
-The software provider targeted by hackers is CDK Global.
What services does CDK Global's software typically provide to car dealerships?
-CDK Global's software helps run service departments, process financing for car purchases, and more at car dealerships.
How many dealerships were affected by the cyber attack according to the script?
-The cyber attack locked up the system at approximately 15,000 dealerships nationwide.
What was the ransom demand reported by Bloomberg?
-The ransom demand by the hackers was reported to be in the millions of dollars to release the locked system.
What is the role of the DMS system in automotive dealerships as mentioned by Tyson Jany?
-The DMS system is the backbone of an automotive dealership, linking together new and used vehicle sales, the finance office, and the service department.
How has the cyber attack affected consumers at the dealerships?
-Consumers may be having trouble getting oil changes and warranty work done at dealerships as a result of the impact on the DMS system.
What was the experience of Ernest and Leand Ein Holtz at the Lexus dealership?
-Ernest and Leand Ein Holtz had to wait for hours at the Lexus dealership as the finance manager had to manually input information and provide a paper receipt due to the system being down.
What is the expected timeline for CDK Global to restore its systems?
-CDK Global expects all dealer connections to be live by the morning of July 4th.
What advice does the script give to consumers who are in the market for a new car?
-The script advises consumers to be patient, consider dealerships that do not use CDK Global's software, or wait until after the July 4th holiday when CDK Global expects to have its systems restored.
Outlines
🚗 Impact of Cyberattack on Car Dealerships
The video script discusses the aftermath of a cyberattack on CDK Global, a software provider for many US car dealerships. The attack has significantly impacted the ability of these dealerships to sell cars, with some experiencing a 50% drop in new car sales. The software, which is crucial for managing service departments, processing financing, and other dealership operations, was held for ransom by hackers. This has not only affected car sales but also routine services like oil changes and warranty work. JD Power estimates that the attack may have caused a more than 5% drop in June retail sales compared to the previous year. The script also mentions the manual workarounds dealerships have had to adopt in the absence of the software, such as typing information by hand and providing paper receipts, which has doubled the time required for transactions. CDK Global is working on restoring the system and expects all dealer connections to be live by July 4th.
Mindmap
Keywords
💡Cyber attack
💡CDK Global
💡Ransom
💡JD Power
💡Dealer Management System (DMS)
💡New Jersey Lexus dealership
💡Service departments
💡Financing
💡Paper receipt
💡Restoration process
💡July 4th holiday
Highlights
US car dealerships are facing difficulties due to a cyber attack on CDK Global, a key software system provider.
The cyber attack has resulted in a potential 5% drop in June retail sales compared to the previous year.
New Jersey Lexus dealership owner, Tom Mayoli, reports a 50% drop in new car sales due to the cyber attack.
CDK Global's software is crucial for dealerships, helping with service departments, financing, and more.
Hackers have locked up the system at around 15,000 dealerships, demanding a ransom in the millions of dollars.
Consumers may face difficulties in getting services like oil changes and warranty work due to the system outage.
Customers at May's Lexus dealership experienced delays as the finance manager had to manually input information.
CDK Global is working on restoring the system and aims to have all dealers live on their management system by July 4th.
Dealership owner Tom Mayoli is concerned about the financial impact of the cyber attack on his business.
Customers are advised to be patient as the process of buying a car may take longer than usual.
Not all dealerships use CDK Global's software, so consumers have alternatives for purchasing cars.
CDK Global expects to resume normal operations by the July 4th holiday, which is a significant sales period for dealerships.
The cyber attack has highlighted the dependence of modern businesses on automated systems.
The incident serves as a reminder for the need of robust cybersecurity measures in business operations.
The impact of the cyber attack extends beyond sales, affecting after-sales services as well.
The incident underscores the potential economic consequences of cyber attacks on specific industries.
The cyber attack on CDK Global has disrupted the operations of a significant portion of the US car dealerships.
The attack has caused a significant drop in sales and increased the time required for transactions.
The restoration process by CDK Global is ongoing, with the aim to minimize the impact on dealerships and customers.
Transcripts
most us car dealerships are still
struggling to deal with a Cyber attack
that crippled a key Software System and
hampered their ability to sell cars the
whole mission hackers struck the
software provider cdk Global about two
weeks ago holding the system for ransom
JD Power estimates that that attack may
have caused June retail sales to drop
more than 5% compared to last year our
senior consumer investigative
correspondent Anna Werner has been
following the
story this New Jersey Lexus dealership
shows off its shiny new cars as usual
but owner Tom mayoli says the Cyber
attack has slowed sales how much do you
think it might cost you do you have any
sense at all uh I don't have a number on
it yet and we're we're trying to
calculate that but I can tell you right
now our sales just on the new car sales
we down 50% this month many dealerships
like his run with the help of dealer
management system software from company
cdk Global the software helps to run
service departments process financing
for car purchases and more but hackers
locked up the system at some 15,000
dealerships Nationwide demanding a
ransom reported by Bloomberg to be in
the millions of dollars to release it
Tyson jany is with JD Power System the
DMS system that's been targeted in this
attack uh is the backbone of an
automotive dealership it basically links
together all the new vehicle used
vehicle sales along with the finance
office and even down to the service
department so consumers right now may
even be having trouble getting oil
changes and and getting warranty work
done at a dealership uh as a result of
this impact on Monday Ernest and leand
Ein Holtz came to May's Lexus dealership
to buy a new SUV but sat and waited as
finance manager Tony carluchi deprived
of his usual fast Software System typed
in information by hand even giving them
a paper receipt uh we didn't expect too
much of a delay but we've been here
since uh yeah when about 10ish 10:00
this morning yeah and it's now 304 3
since the system has been down it's been
taking at least double the amount of
time uh for us to do everything we need
to do cdk Global would not say whether
it had paid the ransom demanded by the
hackers it told CBS News it's continuing
its restoration process and rapidly
bringing dealers live on the dealer
management system and expects all dealer
connections to be live by the morning of
July 4th owner mayoli says he has no
choice but toit but says he's losing
money in the process but you're still
smiling somehow well you know what what
could you do the Ein Holz has waited two
until their sales transaction was
finished driving off in that new SUV
some 6 hours after they
arrived so what do you do if you're in
the market for a new car you don't want
to sit for hours well remember that not
all dealerships use this software it's a
little more than half so you may be able
to find another option for buying a car
or if you're not in a rush just wait a
week or to cdk Global does say it
expects to have its systems up and
running again by the holiday and I think
the dealerships have their fingers
crossed on that those July 4th holiday
sales are huge usually yeah and you know
if you look at it right everything is
automated right you're at work you have
your uh Microsoft uh office right runs
everything that you interact with all of
a sudden imagine that all the stuff you
do by computer you have to do pen and
right the old days yeah you're right
about that but that's good advice though
just be patient yeah a little patience a
lot of people do buy cars on the day
they come in according to mayoli though
all right andna thank you so much
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Loss about $700 on selling a vehicle; Second-hand dealers can't sell a single car a month.
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