CDK Outage May Affect Q2 Numbers

Matthew Guy
by Matthew Guy

The vast majority of our readers are up to speed on the CDK ransomware attack, a cybersecurity incident which brought the software used by over 15,000 North American car dealerships to its knees. With second quarter sales numbers due out this week, speculation is running rampant about the effect it will have on the total number of deliveries reflected in official reports.

The CDK confab happened over two weeks ago, and the software company has yet to haul itself out of the gutter to present its customers anything even remotely resembling a working system. Keep in mind this is a package which fuels just about every corner of a dealership, from sales to service, meaning it has been a chaotic couple of weeks for certain stores. This author has spoken to numerous dealer principals and service managers off the record about the outage and it is safe to say there is a biblical amount of handwringing and gnashing of teeth.

Work is getting done and sales are happening, albeit at much slower pace. Most information from such repairs or deals is currently sitting on handwritten paper, awaiting input into a system which has yet to resume a skiff of functionality. The backlog is expected to take some time to clear – even if CDK returns to full speed by the end of this week, it will be a spell before all the paperwork generated over the last couple of weeks can be inputted. Is ‘inputted’ a word? It is now.

Even if sales have happened at dealer level, the mother ship will have a hard time counting them all correctly for a Q2 sales report since many records are sitting on someone’s battered desk in a wood paneled office which still stinks slightly of cigarette smoke because the place hasn’t been meaningfully updated since Jesus was a cowboy.

This could mean lower-than-expected numbers for June, followed by a rebound in July when reporting catches up. Keep this in mind 30 days from now when some manufacturers inevitably brag it’s their BEST JULY EVER. Same goes 12 months hence when a dunderhead is guaranteed to trumpet a huge percentage increase in year-over-year sales comparing June 2024 to June 2025. Or maybe everything will be properly backdated and correctly accounted.

Yeah, right.

We’ll keep an ear to whatever trickle of numbers are released in the coming days for Q2 auto sales in America. Some brands have become notoriously, erm, elastic with their reporting schedules – but watch this space for any quirks.

[Image: RossHelen/]

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Matthew Guy
Matthew Guy

Matthew buys, sells, fixes, & races cars. As a human index of auto & auction knowledge, he is fond of making money and offering loud opinions.

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3 of 6 comments
  • El scotto El scotto on Jul 02, 2024
    Stupid is as stupid does. I would imagine most car dealers only computerized when some salesperson showed them it could make/save them money. Pay for anti-virus protection and such? A waste of dealership money. BTW does anyone know if Bark Baruth has written anything on this?
    • Advance_92 Advance_92 on Jul 03, 2024
      It's been long enough that dealers had more remedial (even separate) computerized sales and service systems before CDK. Such systems were too primitive to hack unless you went in at night or were a disgruntled (and technically competent) employee. The skill to run those systems cost money so when a middle ware provider says you can reduce your technical staff and do all your work with their application it looks like (and should be) a good deal. Sadly the middleman wasn't very secure. Nothing on the dealer end (for any dealer) makes a difference. I'll guess CDK's data provider was also secure; it's all on them. I just worry it'll be another excuse to keep prices high. It hasn't been worth shopping new since 2020.
  • Pale ghost Pale ghost on Jul 03, 2024
    In the mid 70s we were doing an IT audit at a plant in the middle of MO that manufactured automotive paint. Among the other deficiencies was the site did not have a backup disaster recovery site within 100 miles. We pointed out that doing payroll and even producing the batch cards to make paint would be impossible if the computer went down. The plant manager said the reason they don't have a back up site is that there are no other companies with an IBM 360 they could partner with anywhere nearby. He dismissed our concerns. They would do payroll by hand and 'we made paint before computers and I'm sure we still can'. About a year later the mainframe crapped the bed. The 500 wage roll workers told the payroll clerk how much of an advance they wanted and she typed out checks on an IBM Selectric typewriter. When the beast came backup up they ran payroll and backed out the advances. The payroll calculations were complicated with a union and all. Shift differentials, call in allowances, different types of overtime, meal allowances, you name it. The amazing thing was how accurate the wage roll guys' advance request calculations were. And yeah, they were still able to make ship paint.
  • Bd2 Probably too late to do anything about it for the launch, but Kia should plan on doing an extensive refresh of the front fascia (the earlier, the better) as the design looks really ungainly.
  • Namesakeone Since I include SUVs and minivans as trucks, I really cannot think of a brand that is truly truckless. MG maybe?
  • Sobhuza Trooper Subaru, they were almost there with the BRAT. --On a lighter note, where the hell is my Cooper Works Mini truck?
  • Mike Evs do suck, though. I mean, they really do.
  • Steve Biro I don’t care what brand but it needs to be a compact two-door with an ICE, traditional parallel hybrid or both. A manual transmission option would be nice but I don’t expect it - especially with a hybrid. Don’t show me an EV.