A group claiming to have hacked CDK Global, a software provider to thousands of car dealerships in North America, has demanded tens of millions of dollars in ransom. Following the breach and shutdown of systems on June 19, chaos has unfolded at many of the roughly 15,000 car dealerships that rely on CDK’s services. The disruption caused by the outage has hampered sales, interrupted repairs, and delayed vehicle deliveries, impacting an industry that generated over $1.2 trillion in U.S. sales last year.

The hackers behind the attack, believed to be based in eastern Europe, have demanded a significant sum of money from CDK Global. The extortion demand comes after similar incidents, such as hackers seeking $50 million from a lab services company in London. The rise in ransomware attacks poses a significant threat to businesses and organizations, with companies like UnitedHealth Group Inc. acknowledging payment of a $22 million extortion fee earlier this year.

While CDK attempted to restore some services following the initial attack, a subsequent cyberattack forced the deactivation of these services. The disruption highlights the critical role that CDK’s dealership management system (DMS) plays in the day-to-day operations of auto retailers. The high level of reliance on a small number of DMS providers has left thousands of dealerships vulnerable to cyber threats and system outages.

The aftermath of the cyberattack has reverberated across the automotive industry, impacting companies like Sonic Automotive Inc. which rely on CDK’s services for essential dealership operations. Sonic, along with other dealer groups like AutoNation Inc. and Group 1 Automotive Inc., have experienced disruptions due to the attack. Additionally, CDK Global’s parent company, Brookfield Business Partners LP, suffered a significant decline in trading, signaling broader repercussions in the market.

The hacking of CDK Global and the subsequent ransom demand represent a serious cybersecurity threat to the automotive industry. The incident highlights the vulnerabilities of relying on a limited number of DMS providers and the potential financial and operational consequences of cyberattacks on businesses. As companies navigate the aftermath of the breach and work towards recovery, it is crucial for industry stakeholders to prioritize cybersecurity measures and resilience to mitigate future risks.

Technology

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