The Cyberattack and Immediate Response
On June 19, 2024, CDK Global, a major software provider for car dealerships, detected a significant cyberattack. This incident led CDK to shut down its IT systems, phones, and applications to prevent further damage. The preemptive shutdown included taking their two data centers offline, severely impacting their ability to deliver services to over 15,000 car dealerships across North America.
CDK Global’s software-as-a-service (SaaS) platform supports various dealership operations, including customer relationship management (CRM), financing, payroll, inventory management, and back-office functions. The shutdown left many dealerships unable to perform essential operations, such as tracking and ordering car parts, conducting sales, and processing financing, during the peak car-buying season, thus amplifying the impact.
Operational Disruptions
The immediate consequences of the attack were widespread. Dealerships across the U.S. reported having to revert to manual processes, using paper and pencil for orders and scheduling, which led to significant slowdowns and customer frustration. Some dealerships even sent employees home due to the inability to continue normal operations. There were also concerns about potential secondary attacks through always-on VPNs that connect dealerships to CDK’s data centers.
Craig Schreiber, one of the owners of Northtown Automotive Companies, stated, “We are able to go ‘old school’ as a result of our prior preparation, including the use of handwritten, manual forms in all of our departments. Inevitably, the disruption will result in a backlog of input once the automation comes back online, but for the time being, our operations go on”.
Eric Watson, vice president of sales operations for Kia America, acknowledged in a letter to retail partners that the shutdown was disrupting the business of many Kia dealers who use CDK’s platform and advised them to use manual tools while waiting for systems to be restored.
Identifying the Attackers
The ransomware group BlackSuit was identified as the entity behind the attack. BlackSuit is known for demanding substantial ransom payments and has a history of targeting large organizations. The group employs double-extortion tactics, where they not only encrypt victims’ data but also threaten to publish it unless a ransom is paid.
In response to the attack, CDK Global advised dealerships to disconnect their VPNs and shut down access to mitigate further risks. Despite these measures, the full restoration of services was expected to take several days or even weeks, given the severity of the attack and the need to ensure system security before resuming operations.
Dealer Experiences and Expert Insights
Employees at multiple car dealerships expressed frustration over the lack of communication from CDK, noting that the company had not provided detailed information beyond the initial announcement of the cyber incident. One dealership employee reported on Reddit, “We are almost to that point… no parts, no ROs, no times… just dead vehicles with nothing to show for them or parts to fix them”.
Brad Holton, CEO of Proton Dealership IT, a cybersecurity and IT services firm for car dealerships, highlighted the risks associated with the always-on VPNs used by dealerships to connect to CDK’s data centers. He noted that these VPNs could potentially be used by threat actors to pivot into the internal networks of car dealerships.
Broader Industry Implications
This cyberattack has highlighted significant vulnerabilities within the automotive sector’s digital infrastructure. It underscores the critical need for robust cybersecurity measures, especially for industries heavily reliant on SaaS platforms. The incident demonstrates the potential for substantial operational and financial disruption when core systems are compromised.
Industry experts have emphasized the importance of enhancing cybersecurity protocols and investing in more resilient IT infrastructures to prevent similar incidents in the future. The attack has also sparked discussions about the necessity of better security practices and the potential need for regulatory measures to ensure the protection of sensitive data within the automotive industry.
Ongoing Efforts and Future Considerations
CDK Global has been actively working to restore its systems. According to spokesperson Lisa Finney, the restoration process began on Saturday and was expected to take “several days” to complete. However, subsequent cyberattacks complicated the recovery efforts, necessitating further shutdowns and prolonging the disruption.
The automotive industry is now facing a critical juncture where it must balance the adoption of advanced digital solutions with the implementation of stringent cybersecurity measures. The CDK Global incident serves as a wake-up call for the industry to prioritize cybersecurity to safeguard against future threats.
Conclusion
The CDK Global ransomware attack has had a profound impact on U.S. car dealerships, disrupting operations and highlighting critical vulnerabilities in the industry’s digital infrastructure. As dealerships work to recover, this incident serves as a stark reminder of the importance of robust cybersecurity measures and the need for continued vigilance against cyber threats.
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