The massive car dealership slowdown could end this week

Car dealerships have been forced to find alternative ways of doing business over the past few weeks.

Car dealerships have been forced to find alternative ways of doing business over the past few weeks.

CDK Global says its dealer management system should be back online by late Wednesday or early Thursday, or about two weeks after the software provider was hit with back-to-back cyberattacks last month.

“We are continuing our phased approach to the restoration process and are rapidly bringing dealers live on the Dealer Management System (DMS),” the company said in a statement. “We anticipate all dealers connections will be live by late Wednesday, July 3 or early morning Thursday, July 4.”

CDK, which serves almost 15,000 car dealerships across North America, was first hit by an attack early morning on June 19. That forced it to shut down its systems, which are relied on by dealerships to conduct most of their routine business. Later that evening, a second “cyber incident” occurred.

Car and heavy truck dealers across the U.S. have been forced to find alternative ways to conduct business, since they now lack access to CDK’s suite of services like e-signing and appointment scheduling tools. Some are unable to even access customer records. Major dealers such as AutoNation, Lithia Motors, and Sonic Automotive have been affected.

The six largest public U.S. dealers — which include those three companies, as well as Asbury Automotive and Group 1 — will likely see a 10% drop in their second quarter earnings because of the disruptions, according to J.P. Morgan analysts. The sixth company, Penske Automotive, has said it only uses CDK’s systems for its Premier Truck Group.

Due to the disruptions, a “significant number of sales” that were expected to be conducted in June are projected to occur later this month, according to J.D. Power. The Michigan-based Anderson Economic Group has said losses from the disruptions could total $944 million if they were unresolved by July 6, according to Automotive News.

The cyberattack against CDK was launched by the BlackSuit ransomware gang, according to BleepingComputer, which demanded tens of millions of dollars in ransom. The group became widely known last April, and earlier this month it published hundreds of stolen files from a Kansas police department that it claims refused to pay its ransom.

Besides the overall impacts on CDK and the dealers it services, the software provider is facing at least two potential class-action lawsuits in federal court from people who claim the company neglected to safeguard their information. The lawsuits are seeking damages, for CDK to increase its efforts to protect personal information, and to purge all personal identifiable information related to the plaintiffs.

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