Car dealership losses from CDK software outage could soon reach $1 billion, study finds

Cyber incidents at software provider CDK Global from mid-June have left car dealerships across the US with suspended operations, with losses in the hundreds of millions of dollars.

Direct losses to the auto dealerships impacted by outages at major software provider CDK Global in recent weeks could reach a collective $1 billion if the problems are not fixed soon, according to new data.

Michigan-based Anderson Economic Group (AEG) estimates that the ongoing operational disruptions will cost dealers $944 million if the issues extend into this weekend, which would be the third week of shutdowns.

CDK shut down its systems on July 19 after discovering two cyber incidents. AEG analysts said the first two weeks have already cost dealers more than $600 million.

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The outage had forced some auto dealers to revert to manual paperwork as the car industry technology and software provider worked to restore systems used by more than 15,000 retail locations across the U.S. and Canada.

CDK told Reuters Monday that it plans to have its dealership management systems (DMS) up and running for all customers by early morning July 4. The company also said its customer care channels had been restored and it was "actively working" on bringing other applications live.

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The company had said last week it brought two small groups and one large publicly traded group of auto retailer live on DMS as part of its phased approach.

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A joint forecast released by J.D. Power and GlobalData last week warned that new-car sales in the U.S. would be down year-over-year in June because of the outages at dealerships, but said sales should rebound in July if operations are fully restored in time.

Reuters contributed to this report.