Ryan Payne, President of Payne Capital Management, appeared on “Mornings with Maria” to explain the latest data on the auto industry.
Direct losses for car dealerships affected in recent weeks by an outage at major software provider CDK Global could total $1 billion if the issue is not resolved soon, new data shows.
Michigan-based Anderson Economic Group estimates that if the problems continue into the weekend, it will be the third week of shutdowns, and that the ongoing disruption could cost dealers $944 million.
Vehicles for sale at an AutoNation Honda dealership in Fremont, California, Monday, June 24, 2024. A cyber incident at CDK has disrupted operations at thousands of auto dealerships across North America. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
CDK shut down its systems on July 19 after discovering two cyber incidents, which AEG analysts say have already cost dealers more than $600 million in losses in the first two weeks.
CDK Global software outage causes chaos, reeling auto dealership owners
The outage forced some car dealerships to revert to manual paperwork while auto industry technology and software providers worked to restore systems used by more than 15,000 retail stores in the United States and Canada.
A cyber incident that occurred at CDK Global two weeks ago has disrupted operations at thousands of car dealerships in the United States. (Igor Golovniov/SOPA Images/LightRocket via Getty Images / Getty Images)
CDK told Reuters on Monday it plans to have its dealer management system (DMS) up and running for all customers by the early hours of July 4. The company also said its customer care channels have been restored and it is “actively working” to roll out other applications.
Tesla deliveries may disappoint again
The company announced last week that it had onboarded two smaller groups of auto dealers and one larger group of publicly traded companies to DMS as part of a phased effort.
This used car will be available for sale at a dealership in Chicago, IL on July 11, 2023. (Scott Olson/Getty Images/Getty Images)
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A joint forecast released by J.D. Power and GlobalData last week warned that U.S. new-vehicle sales would fall year-over-year in June due to dealer outages, but said sales should recover in July once operations are fully restored.
Reuters contributed to this report.
