Many are wondering: Is CDK still down? More than a week after a significant cyberattack forced CDK Global to shut down its systems, the software provider announced it is gradually restoring various applications.
CDK cyber attack: Today’s update on system status
This shutdown has severely disrupted operations for over 15,000 car dealerships across North America, many of which had to revert to handwritten forms to manage vehicle sales, financing, and maintenance.
CDK Global’s cloud-based software is integral to dealership operations, facilitating everything from vehicle acquisitions to repairs. The cyberattacks, which occurred last week, led to the decision to take most systems offline as a precaution. This has left many dealerships scrambling to maintain business continuity without their usual digital tools.
In a recent statement, CDK Global outlined its “phased approach” to bringing customers’ software back online. As part of this process, the company has successfully reactivated its Dealer Management System for two small groups of dealers and one large publicly traded dealer group. Efforts are also underway to restore additional applications and customer support channels.
Is CDK still down?
The answer is unfortunately, yes.
Despite these steps, CDK has cautioned its customers that the full restoration of services will take time. The company has informed clients that it does not expect to have “all dealers live” until June 30. This timeline highlights the extensive impact of the cyberattack and the complexity involved in securely bringing systems back online.
June vehicle sales are impacted by CDK Global cyber attack
The automotive industry is facing significant disruptions due to the recent cyberattack on CDK Global, a major software provider for dealerships. J.D. Power estimates that total new vehicle sales for June 2024 will reach around 1,273,600 units, reflecting a 7.2% decrease from June 2023. This figure includes both consumer sales and fleet sales to businesses and rental companies.
On an annualized basis, this translates to a selling rate of approximately 15 million units for the year, falling short of the 16 million units that the industry should ideally achieve, as noted by Tyson Jominy, Vice President of Data & Analytics at J.D. Power.
The average transaction price for new vehicles is currently $45,000, indicating that the financial impact on dealerships could be substantial. Many of the lost sales in June might be recovered in July, assuming CDK systems are fully restored by then.
What happened?
The cyber attack on June 19, 2024, severely affected CDK’s SaaS platform, which supports over 15,000 car dealerships in North America. This platform manages critical operations, including CRM, financing, payroll, support and service, inventory, and back-office functions. While the exact nature of the attack remains uncertain, it is rumored to have been a ransomware attack that compromised backups.
As CDK Global was progressing with service restoration, a second cyberattack struck, forcing another shutdown. This subsequent breach worsened the situation, causing extended outages and increasing frustration among dealerships. The recurrence of attacks has raised significant concerns about the effectiveness of CDK’s initial response and the strength of their cybersecurity measures.
Launched in May 2023, BlackSuit, the hacker team behind the incident, is believed to be a rebranding of the Royal ransomware operation, itself a successor to the notorious Conti cybercrime syndicate. Composed of Russian and Eastern European threat actors, this organized gang has been a persistent threat. In June 2023, during talks of a potential rebrand, the Royal Ransomware group tested a new encryptor named BlackSuit, coinciding with their attack on the City of Dallas, Texas. Following this, the group ceased using the Royal name, consolidating their activities under the BlackSuit brand.
Image credits: Kerem Gülen/Midjourney
