Ripple effect from CDK hack widens as more US auto dealers flag hit

(Reuters) – More U.S. auto dealers flagged a hit from an outage of CDK’s software system due to a cyber attack on Monday as the company worked to restore systems used by over 15,000 retail locations across North America.

AutoNation, a leading auto retailer in the U.S. said the outage was disruptive and had adversely impacted its business though its outlets remain open, continuing to sell, service, and buy vehicles.

“As the incident is ongoing, the full scope, nature and impact of the incident is not yet known,” AutoNation said.

The company and peer Group 1 Automotive said they were using alternative processes such as manual paperwork to conduct their business. Both said they had taken precautionary steps to protect their data.

“The timing of the restoration of other impacted CDK applications remains unclear at this time,” Group 1 said in a statement.

Bloomberg News reported on Friday that a group of hackers claiming responsibility for the attack on CDK’s software systems had demanded millions of dollars in ransom to put an end to the hack.

Though auto retailers have not outlined any sales hit, analysts have flagged a possible impact. “We note some potential risk to late-June (U.S. auto sales) volume from the reported CDK dealer disruptions,” Citi analysts said in a note last week.

Auto retailer Sonic Automotive, last week, said the CDK outage was likely to have a negative impact on its business operations until the systems were fully restored.

Penske Automotive said its Premier Truck Group business had implemented business continuity plans in response to the outage.

(Reporting by Kannaki Deka and Shivansh Tiwary in Bengaluru; Editing by Mohammed Safi Shamsi)