Massive computer outage at car dealerships could last for days, company says

By Peter Valdes-Dapena, CNN

(CNN) — US and Canadian auto dealerships remained at a near-standstill on Thursday because of a second cyber incident at data provider CDK Global, whose software is used at 15,000 auto dealers – an outage that could last for days, perhaps eating into sales over the first official weekend of summer.

On Wednesday, CDK spokesperson Lisa Finney said in a statement shared with CNN: “We are actively investigating a cyber incident. Out of an abundance of caution and concern for our customers, we have shut down most of our systems and are working diligently to get everything up and running as quickly as possible.”

Later that day the company announced that most of the critical computer systems were back online. But Thursday morning, the company sent dealerships another message indicating things had a taken a turn for the worse.

“Late in the evening of June 19, we experienced an additional cyber incident and proactively shut down most of our systems. In partnership with third party experts, we are assessing the impact and providing regular updates to our customers,” CDK said in a statement shared Thursday morning. “We remain vigilant in our efforts to reinstate our services and get our dealers back to business as usual as quickly as possible.”

The company later told dealers the systems could be down for several days, according to two sources briefed on the situation.

CDK operates numerous different products that car dealers use to handle things like keeping records of negotiated deals to scheduling and communicating about service. Not every dealer uses CDK’s products, and even those that do may not use them for everything, but the system shutdown has been a problem for many.

“We have customers coming in today who had deals saved in the system,” said Jeff Ramsey, an executive with Ourisman Auto Group, which is headquartered in Maryland.

To protect customer privacy, customers’ details aren’t written out on a piece of paper that’s just sitting on a desk anymore. Instead, information about deals and customer appointments is kept in a server that’s now impossible for his salespeople to access.

How this affects buying a car now

Ramsey said he understands, though, that CDK is doing what it feels it must to secure this sensitive data. But it’s a major hassle in the meantime and could cost his dealerships some business. Customers who are delayed in closing a sale at one of his dealerships could just find a dealer nearby that’s not having these issues and buy a new vehicle there, instead.

It’s car buying season, so it’s a real concern.

“We’re in the summer months,” he said. “This is where we need systems functioning.”

Ramsey and Brian Benstock, general manager of Paragon Honda and Paragon Acura in Long Island City, New York, both said they were continuing to do business and were selling cars in spite of the problems.

“My selling team can hand-write a buyer’s order,” said Benstock.

But salespeople could lack access to customer agreements that had been previously negotiated, making it harder to close those sales, dealers CNN spoke with said. There’s more than just the negotiated price of the car involved, since these agreements can involve rebates and incentives, some of which customers must show they’re qualified for.

Ramsey, whose company operates a number of dealerships, said automakers including Kia, Toyota and Stellantis, which makes Jeep and Dodge vehicles, have been very helpful with finding ways serve customers even with all technology issues.

Ford also said its dealerships involved in the CDK outage have alternate ways to take care of customers.

“Although there is an industry-wide system outage for some dealers who use CDK, Ford and Lincoln customers are able to receive sales and service support due to alternative processes available to our dealers. While a customer’s local dealer remains the best place for information about their sales and service needs, they can always contact the Ford Customer Relationship Center at 1-800-392-3673,” Ford said in a statement shared with CNN.

Not just car sales, but parts and service can also be disrupted.

The bigger hassles will be for the dealership’s accountants and businesspeople, Benstock said. Plenty of his employees have been in this business since before it became networked and computer dependent, he said, but it’s still a problem and he’s still worried about customer data.

The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.