The recent cyberattacks on a major software provider have forced car dealerships across North America to revert to an unexpected analog solution - pen and paper.
What happened
Last week, CDK Global, a prominent software company providing technology solutions to over 15,000 auto dealerships in North America, fell victim to major cyberattacks. These attacks, which targeted the company's core systems, led to an extensive outage that has continued to disrupt dealership operations across the United States and Canada.
With CDK's systems offline, dealerships have been forced to resort to manual processes to serve their customers. This has meant writing up vehicle orders by hand, relying on alternative financing and insurance options, and working through the challenges of providing a seamless sales experience without the aid of their usual digital tools.
The backstory
CDK Global has long been a dominant player in automotive retail technology, offering a suite of software solutions that streamline various aspects of the car-buying process. From facilitating sales and financing to managing repairs and inventory, CDK's platforms have become integral to the day-to-day operations of thousands of dealerships.
However, the company's reliance on digital infrastructure has also made it a prime target for cybercriminals. The recent attacks, which have been described as "cyber incidents" by CDK, have exposed the vulnerabilities inherent in such a centralized system. As the company works to restore its systems, dealerships have been left to deal with the fallout, adapting their processes to ensure they can continue serving their customers.
Going deeper
The impact of the CDK outage has been felt across the industry, with major automakers like Stellantis, Ford, and BMW confirming that their dealerships have been affected. Customers seeking to purchase or service their vehicles have encountered delays and inconveniences as dealerships work through the challenges posed by the lack of digital tools.
Group 1 Automotive, a prominent automotive retailer with over 200 dealerships in the U.S. and the U.K., has been one of the hardest hit. The company has reported that the incident has disrupted its business applications and processes, forcing it to rely on "alternative processes" to continue operations.
In the know
The cyberattacks on CDK have also raised concerns about the security and privacy of customer data. With little information available about the nature and scope of the incident, dealerships, and their customers are understandably anxious about the potential compromise of sensitive information.
The National Automobile Dealers Association (NADA) has stated that dealers are "very committed to protecting their customer information" and are actively seeking guidance from CDK to address the situation appropriately.
Why it matters
The disruption caused by the CDK outage proves technology's necessary role in the modern automotive retail industry. As dealerships have become increasingly reliant on digital tools to streamline their operations, the sudden loss of these capabilities has exposed the industry's vulnerability to cyber threats.
Moreover, the shift to manual processes has the potential to impact the overall customer experience, potentially leading to longer wait times, delays in vehicle deliveries, and a less seamless transaction process. This could have far-reaching consequences for the automotive industry, which has already faced significant challenges in the wake of the COVID-19 pandemic.
As the industry grapples with the fallout from the cyberattacks, it is clear that the need for cybersecurity measures and resilient technology infrastructure has never been more pressing. Dealerships and software providers alike must work together to strengthen their defenses and ensure that the car-buying experience remains efficient, secure, and customer-centric.
Farah Amod
