Major cyberattack still hampering car dealerships

CBS News

2 Jul 202403:36

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

00:00

🚗 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

A cyber attack refers to any attempt to gain unauthorized access to a computer, server, or database with the intent to disrupt, extract, corrupt, or delete sensitive information. In the context of the video, a cyber attack crippled a key software system used by most US car dealerships, which significantly impacted their operations and sales.

💡CDK Global

CDK Global is a company that provides integrated information technology and digital marketing solutions to the automotive retail industry. In the video, it is mentioned as the software provider that was targeted by hackers, leading to a widespread disruption in the operations of numerous car dealerships.

💡Ransom

Ransom, in the context of cyber attacks, is a demand for payment in exchange for restoring access to the compromised system or data. The script mentions that hackers struck CDK Global and demanded a ransom, which is reported to be in the millions of dollars.

💡JD Power

JD Power is a global marketing information services firm that provides insights, advisory services, and data and analytics to the automotive industry. In the script, JD Power estimates the impact of the cyber attack on car sales, suggesting a significant drop in June retail sales.

💡Dealer Management System (DMS)

A Dealer Management System is software that helps dealerships manage their day-to-day operations, including sales, service, and finance. The script highlights that the DMS provided by CDK Global was targeted in the cyber attack, affecting the core functions of many dealerships.

💡New Jersey Lexus dealership

The New Jersey Lexus dealership is used as an example in the script to illustrate the impact of the cyber attack on a specific business. The owner, Tom Mayoli, discusses the significant drop in sales and the challenges faced due to the disruption in the software system.

💡Service departments

Service departments in car dealerships are responsible for vehicle maintenance and repairs. The script mentions that the cyber attack affected not only sales but also service departments, as they rely on the DMS for scheduling and processing service-related tasks.

💡Financing

Financing refers to the process of obtaining funds to purchase a vehicle. The script explains that the cyber attack on the DMS system made it difficult for dealerships to process financing for car purchases, as the system was locked by hackers.

💡Paper receipt

A paper receipt is a physical document that serves as proof of a transaction. In the video, it is mentioned that due to the software system being down, the finance manager had to resort to typing information by hand and providing paper receipts, illustrating the regression to manual processes.

💡Restoration process

The restoration process refers to the steps taken to recover and restore systems and data after a cyber attack. CDK Global is mentioned as being in the process of restoring its systems to bring dealers back online.

💡July 4th holiday

The July 4th holiday, also known as Independence Day in the United States, is a significant time for retail sales, including car dealerships. The script notes that CDK Global expects to have its systems restored by this holiday, which is crucial for dealerships hoping to capitalize on the sales period.

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.