AutoNation Inc. led shares of publicly listed dealership groups lower Thursday, falling as much as 4.6% in intraday trading. Lithia Motors Inc., Group 1 Automotive Inc. and Sonic Automotive Inc. also slumped. Greg Thornton, the general manager of a dealership group in Frederick, Maryland, said his stores’ CDK customer-relations software had been down since early Wednesday morning. “I can only assume that CDK is working all hands on deck to resolve this,” said Thornton, whose group includes Audi and Volvo stores. The National Automobile Dealers Association said Wednesday it was actively seeking information from CDK to determine the nature and scope of the cyber incident. CDK was spun off by Automatic Data Processing Inc. in 2014, then agreed to be acquired in April 2022 by the investment company Brookfield Business Partners in an all-cash deal valued at $6.4 billion.
**Introduction**
Recent cyber incidents have impacted the automotive industry, leading to disruptions in dealership operations and causing shares of dealership groups to decline. In this article, we will explore the effects of the cyber incident on dealership groups and how industry players are responding to the situation.
**Impact on Dealership Groups**
The outage of CDK’s customer-relations software has had a significant impact on dealership groups across the country. Greg Thornton, a general manager of a dealership group in Frederick, Maryland, reported that their CDK software had been down since early Wednesday morning. This outage has affected the group’s ability to conduct day-to-day operations and communicate with customers effectively. The decline in share prices of dealership groups such as AutoNation Inc., Lithia Motors Inc., Group 1 Automotive Inc., and Sonic Automotive Inc. reflects the challenges faced by these companies due to the cyber incident.
**Response from Industry Players**
The National Automobile Dealers Association has taken steps to address the situation by actively seeking information from CDK to understand the nature and scope of the cyber incident. Dealership groups are awaiting updates from CDK and are hopeful that the issue will be resolved promptly to minimize disruptions to their operations. Meanwhile, CDK, which was spun off by Automatic Data Processing Inc. in 2014 and recently agreed to be acquired by Brookfield Business Partners, is under pressure to address the outage and restore functionality to its software.
**Cybersecurity Concerns in the Automotive Industry**
The cyber incident involving CDK’s software highlights the cybersecurity risks faced by the automotive industry. Dealership groups rely heavily on technology to manage their operations, including customer relations, inventory management, and sales processes. Any disruption in software or data systems can have far-reaching consequences for dealerships, impacting their ability to serve customers and maintain business continuity. As cyber threats continue to evolve, industry players must prioritize cybersecurity measures to protect their operations and customer data from potential attacks.
**Conclusion**
The recent cyber incident affecting CDK’s software has underscored the vulnerability of dealership groups to cybersecurity risks. Industry players must work together to address these challenges and enhance their cybersecurity defenses to prevent future disruptions. By investing in robust cybersecurity measures and staying vigilant against potential threats, dealership groups can safeguard their operations and maintain the trust of their customers in an increasingly digital landscape.