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

AutoNation

24/06/2024 13:12

(Adds details on AutoNation impact in paragraphs 2-3 and
background throughout)
       June 24 (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  AN.N , 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  GPI.N  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  SAH.N , 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  PAG.N  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)
 ((Kannaki.Deka@thomsonreuters.com))