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Car sellers warn investors about possible financial impact caused by cyber attack
(Bloomberg) — Some of North America’s largest auto dealers are warning of a possible “material” impact on their finances from a cyberattack that slowed operations at thousands of stores.
filed disclosures with the U.S. Securities and Exchange Commission on Friday. Group 1 Automotive Inc., AutoNation Inc. and Lithia Motors Inc. followed on Monday. All five companies use CDK Global, whose so-called dealership management system was disrupted a week ago after a crippling hack.
The disclosures represent the first sign of potential widespread economic impact from the attack on CDK, which serves about 15,000 North American auto dealers. The incident is part of a growing phenomenon in which financially motivated cybercriminals have attacked critical links in the global IT supply chain – the Internet conduits one would least suspect were targets, bringing down entire industries along with them.
Shares of Sonic, Group 1, AutoNation and Lithia have fallen since the hack. Penske shares have risen 2.9% since Wednesday as the company previously said its dealerships were not affected.
The incident “has had, and will likely continue to have, a negative impact,” Sonic said in its regulatory filing. The company has not yet determined whether the CDK disruption will have a material effect on its finances. almost 3% since the hack.
Here’s what other companies are saying about the attack’s impact on business:
The intrusion is the work of a hacking gang known as BlackSuit, Bloomberg reported on Monday. The group appears to be made up of Russian and Eastern European attackers who specialize in so-called ransomware-as-a-service attacks, who rent out their malicious code in exchange for a cut of any extortion payments. The hackers demanded tens of millions of dollars in ransom from CDK, which it intends to pay. CDK said over the weekend that it expects restoring its systems to take “several days rather than weeks.”
CDK provides software that helps dealers manage customer records, schedule appointments, handle auto repair orders, and complete transactions, among other tasks. CDK has not yet restored full service and the outage has forced dealers to stop or delay some services and resort to pen and paper.
(Updates stock prices and adds reporting on BlackSuit starting in second-to-last paragraph.)
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