Thematic Spotlight: US Car Dealers Left Paralysed by Cyberattack

Thousands of car dealerships across the US and Canada were left paralysed after CDK Global, a major software provider, was hacked.¹ CDK’s Dealership Management System which forms the foundation of an auto retailer’s day-to-day business was targeted in the attack. It is estimated more than 15,000 dealerships may be affected, with representatives from General Motors, Ford, Volkswagen, and BMW confirming disruptions in their services.²

As of the 24^th of June, the company remains in lockdown with no set timeframe for return. CDK attempted to resume services on the day of the hack, but immediately suffered a second hack which rendered their services fully defunct. The company is reportedly in negotiation with an eastern-European ransomware gang called ‘BlackSuit’, over a payment which could be in the tens of millions.³ Just last week, a separate ransomware incident saw hackers demand US$50 million from a UK lab-services provider.⁴ UnitedHealth Group, the largest medical insurer in the US, also acknowledged earlier this year it paid hackers US$22 million in extortion fees.⁵

CDK Global’s mire is just one example of a global trend of increasingly frequent cyberattacks in recent years. In 2023, roughly 72.7% of enterprises were affected by ransomware, up from 55.1% in 2018.⁶ Ransomware payments have also become increasingly expensive. Last year, the average ransom payment was US$1.54 million, almost double the 2022 figure of around US$800,000.⁷ Global losses to ransomware payments also topped US$1 billion for the first time ever, up from US$567 million in 2022.⁸ With such startling increases in cybercrime, cybersecurity will likely be front of mind for the government and company executives looking forward. Analysts expect cybersecurity spending to grow to almost US$500 billion by 2030, up from approximately US$275 billion in 2023.⁹

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