In a recent turn of events, nearly 15,000 car dealerships across North America are facing a crippling cyber attack that is impacting their ability to provide services to customers. CDK Global, a data provider used by many dealerships, was targeted by cyber attacks on June 19th, leading to a shutdown of most of its systems.
As a result of this outage, dealerships are struggling to access important information stored on CDK’s servers, such as customer details, deals, and appointments. Some dealerships are resorting to old-fashioned methods to avoid missing out on sales during what is typically a busy time for car shopping.
The impact of this cyber attack goes beyond just dealers and buyers. Last month, car dealerships saw $122 billion in transactions, which accounted for 17% of all retail sales in May. An outage lasting through June 30th could result in a significant loss of sales, with estimates suggesting a potential $16 billion loss if dealerships are unable to operate for 10 days.
This decline in retail sales could have a significant impact on the economy, as consumer spending drives a large portion of the US GDP. A decrease in retail sales for the month of June could lead to a 2.3% decline in total retail sales, affecting the overall economic growth rate.
Investors are closely watching GDP data as a measure of the economy’s health, and any significant drops in retail sales could lead to market instability. With the government set to release second-quarter GDP estimates on July 25th, investors may need to brace themselves for potential fluctuations in the market.
Overall, the cyber attack on CDK Global has highlighted the interconnectedness of the economy and the importance of robust cybersecurity measures to protect critical infrastructure. As dealerships work to recover from this attack, the broader implications on the economy remain a significant concern for stakeholders across various sectors.
