CDK Global, the company that handles sales for thousands of auto dealers in the U.S., says it has restored systems for a small group of dealers after it was hacked last week in what was later described as a ‘ransom campaign’.
“We have successfully brought a small initial test group of dealers live on the Dealer Management System (DMS), and once validation is complete, we will begin phasing in additional dealers,” the company said in a statement to CBS late Wednesday MoneyWatch. A CDK spokesperson did not indicate how many dealers were part of the first test group whose systems were restored.
“We are also actively working to bring additional applications live, including our Customer Relationship Management (CRM) and Service solutions, and our Customer Care channels,” the company said, adding that it recognizes the urgency of the situation for its customers realize.
According to a Bloomberg report, CDK plans to pay a ransom to the group behind the hack, believed to be called BlackSuit, to end the outage. CDK has not indicated whether or not it has made a payment to the group.
Geoffrey Pohanka, president of Pohanka Automotive Group, based in Capitol Heights, Maryland, told CBS MoneyWatch that his company is not among the small number of dealers with CDK systems returning to service Thursday.
Instead, the tools his dealers rely on to make sales, track inventory and manage customer relationships have been out of action for more than a week, throwing his auto and auto parts sales and repair business into disarray.
“We are still working on the solutions, using a paper processing system. The problem is that we cannot load this data back into the system,” Pohanka said. “We can account for the work we’ve done in our general ledger from a financial statement perspective, but it’s very difficult to put all this data back into the system so you can access it later.”
CDK had previously told dealers this do not expect all their systems to be operational by the end of June.
“We feel it is important to share that we do not believe we can get all dealers live before June 30,” CDK Global said in a recorded message on a helpline and in a memo sent to dealers on Tuesday.
Pohanka hopes to have its dealer management system up and running by the first week of July.
“We have to close with manufacturers every month and it will be difficult if it is not operational within the first week of the month,” he said. “But we will figure it out, we will have to do it, we have no choice.”
On Wednesday, data analytics firm JD Power said it predicts retail sales of new cars for June will fall by up to 8.2% compared to the same month a year earlier. The expected dip is not a reflection of consumer demand, but rather the impact of the CDK outage on customers. According to JD Power, sales that would normally take place this month are expected to take place in July.
“Due to the disruption to dealer software systems, June sales will not reflect actual consumer demand for new vehicles,” Thomas King, president of data and analytics at JD Power, said in a statement. “Instead, a significant number of sales that would have occurred in June are now likely to occur in July.”
