(Bloomberg) — A dealer in Phoenix is ​​handwriting paper contracts and evaluating creditworthiness with guesswork. A Jeep owner in Alabama keeps calling about when a replacement part will be in stock. A family in New Jersey is waiting for word on when they can take delivery of their new Audi.
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Such is life for auto retailers and their customers across the US and Canada after CDK Global – a software provider to some 15,000 dealers – was crippled by debilitating cyber attacks. The flurry began on June 19, costing American merchants a boost in business on a federal holiday. CDK has warned that a second incident on Thursday is likely to keep its systems down for several more days.
The attacks have had a crippling effect on an industry that, in the US alone, reached $1.2 trillion in sales last year. CDK’s flagship product—a suite of software tools referred to as a dealership management system, or DMS—supports nearly every element of a car dealership’s day-to-day business.
There are only a handful of DMS providers for marketers to choose from after decades of consolidation. This has made thousands of retailers heavily dependent on each of the select software companies that enable them to line up financing and insurance, manage vehicle and parts inventory, and close sales.
CDK’s parent company, Brookfield Business Partners LP, had its worst trading day since October, falling 5.7% on Thursday. Shares in the AutoNation Inc. dealer group. fell 3.6%, their biggest drop in two months. Group 1 Automotive Inc., Sonic Automotive Inc. and Lithia Motors Inc. stocks also fell.
For Joshua Adams, owner of Jeep in Millbrook, Alabama, CDK’s discontinuation comes at an inconvenient time. He had already spent several weeks without his 2020 Renegade sport utility vehicle while waiting for a warranty claim to be resolved.
This week, he called his dealer to check if the final part needed to fix his vehicle had arrived, as expected. The service center wasn’t sure, saying it was impossible to know because of the hack.
«They can’t tell me where my part is or when it’s going to arrive,» Adams said. «We’re just up in the air.» He expects the delay to cost several hundred dollars in extra expenses for a rental car he’s driving in the meantime.
In New Jersey, the Lanni family was excited to take delivery of a new Audi Q5. Daniel Lanni and his wife had removed the child seats from their old vehicle so they would be ready to fit into the new SUV. But on June 19, their dealer called to say the store’s computer system was down and it was unclear when they would be able to receive the delivery.
Lanni and his wife reinstalled car seats for their children — ages 3, 5 and 8 — and said they hadn’t heard from the dealer as of Thursday afternoon.
«The kids were really excited,» said Lanni, a 41-year-old commercial real estate broker. «They’re upset and now they’re just asking about it regularly.»
Alex Padron, a sales manager at a Nissan dealership in Phoenix, said business was «pretty much at a standstill» Thursday. Everyone who has bought a vehicle from the shop since 2014 — when it started using CDK’s software — has records stored in the system, he said.
«It’s probably more than 50,000» customers, he said.
Dealerships are now writing paper contracts and finding new ways to reach deals. He said workers in the finance department had to «guess» the creditworthiness of customers based on «whatever information they could gather».
Since the attack began, the retailer has been able to process about half the transactions it normally can. Anything complicated—say, a purchase that involves unusual trading or financing—simply can’t be done.
«For this store, I’d like to do 10 full deals a day,» Padron said. «Five, six, seven would be good today.»
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