Cyber Attack Cost Dealers $944 Million
Anderson Economic Group has analyzed direct losses to automotive dealers affected by the hacking and ransomware attack on CDK Global software and systems, and the resulting shutdown or impairment of operations, inability to operate systems, inability to generate orders, complete purchases or sales, and other interruptions of their normal course of business.
Over three weeks, the estimated losses hit $944 million.
AEG estimated only direct losses for auto dealers who were directly affected. The losses include:
Lost earnings on new car sales and used car sales, after taking into account customers that delay purchasing vehicles or scheduling services at an affected dealership.
Lost earnings on service and parts sales.
Additional staffing costs, outside IT services, overtime and outside staffing costs, floor plan interest on inventory (vehicle and parts) that are delayed or interrupted before sales, and additional financing costs for the dealership operation during the time of interruption.
Directly affected dealers include new vehicle dealers (passenger cars and light trucks, with some also selling heavy trucks) in the U.S. and Canada. Additional dealers (including heavy-truck dealers) affected by the interruption are not included in this estimate.
The direct losses to affected dealers estimated here are not the same as total losses to GDP. Some customers will substitute their purchases with other new car dealers, used car dealers, independent repair shops, and parts stores. Some fraction will defer purchases indefinitely.
Actual damages will vary widely among dealers. Some dealers (including those not relying on any affected systems) will incur very little damage; some will incur much more than the average affected dealer. Some dealers (including used car dealers) may even gain business on a temporary basis.