Cyberattacks Cripple Car Dealerships Nationwide, Chattanooga Businesses also Affected

CDK Global, the Automotive Software Company, Victim of Severe Cyberattack

CHATTANOOGA, Tenn. – Car dealerships across the nation are in chaos as they struggle to deal with the aftermath of an intense cyber onslaught. A software firm, CDK Global, that streamlines operations for auto sellers reported that it had been the target of several digital assaults last week, forcing them to suspend all systems. This disruption is not just a national issue; it heavily impacts Chattanooga businesses as well.

A Crippling Effect on Businesses

CDK Global handles a multitude of services including inventory management, scheduling, and maintenance records for auto dealerships. The shutdown of its systems in response to the digital attacks has put car dealerships into a critical situation. The inability to carry out and manage everyday operations from sales to customer service could lead to reduced profits, stalled payrolls, and decreased overall economic activity.

Stan Norton, the chief operating officer of City Auto Sales, emphasized on the impact, “It’s very crippling to the business. Lack of revenue, lack of profit, lack of payroll, lack of people buying groceries, buying cars, buying houses. It’s a severe impact.” Nearly 15,000 auto dealers are suffering due to this outage. Businesses like City Auto Sales that don’t use CDK are still operational, but Norton stressed that for those dependent on CDK, “all that has been shut down.”

Beyond Car Dealerships: A Nationwide Consequence

While direct impacts are felt across the automotive industry, the ripple effects of this cyberattack seep into the broader economy. According to Norton, “It hits all of us in indirect ways.” As CDK accounts for nearly one in $40 spent per year in the U.S. economy, the sustained shutdown could potentially impact economic growth. Even at a local level, this disruption can adversely affect income and tax revenue, further stressing local economies.

Joe Foudy, a New York University business professor, illuminated the massive role of the car industry in the overall economy. “The car sales and the servicing of cars is about 5% of GDP. It’s really big. It’s one in every $20 that’s spent out there,” Foudy stated.

CDK Prepares a Solution Amid Busy Buying Season

Adding to the industry’s worries, the timing of these attacks comes amidst the peak buying time for car dealerships. The cyberattack and the subsequent crisis could lead to a delay in sales. However, as of Wednesday, CDK Global announced that it had successfully restored services to a small group of dealerships and was actively working towards resuming normal operations for all.