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.
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.
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.
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.
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.
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.
