Auto Dealers Look to Increase Security Measures Amid Rising Cyberthreats

Rhea-AI Summary

CDK Global's Inaugural Dealership Cybersecurity Report reveals a significant increase in automotive dealers' commitment to cybersecurity, with nearly half planning to boost investments in 2022, up from 24% in 2020. Despite the increased urgency for cybersecurity (85% of dealers), only 49% feel adequately protected against cyber threats. Major concerns include employee email phishing (66%) and ransomware (48%). The financial repercussions of cyberattacks include an average loss of 16 days of revenue. The report underscores the importance of modernizing security measures and employee training to safeguard dealership operations.

Positive

• 47% of automotive dealers plan to increase cybersecurity investments in 2022, demonstrating heightened awareness of the need for security.
• The report indicates a strong commitment (85%) to prioritize cybersecurity over other operational areas among dealers.
• 65% of dealerships are regularly backing up data and configurations, indicating proactive measures being taken.

Negative

• Only 49% of dealers believe they have adequate protection against cyberattacks, highlighting significant vulnerability.
• 66% of dealerships regard employee email phishing as a major threat, yet less than a third have received formal security training.
• 73% of dealerships are not testing their cyberattack incident response plans, risking inadequate preparation for potential breaches.

CDK Global Inaugural Dealership Cybersecurity Report detects gaps in data protection plans

HOFFMAN ESTATES, Ill.--(BUSINESS WIRE)-- With rising concerns of ransomware and phishing attacks impacting businesses across the U.S., nearly half of automotive dealers surveyed plan to increase their investments in cybersecurity in 2022, compared to only 24% of dealers that invested in security measures in 2020, according to a study by CDK Global, Inc. (Nasdaq: CDK), a leading automotive retail technology company.

“Meeting consumer demand for online automotive retailing while operating on an outdated framework can create a perfect storm for a cybersecurity breach,” said Joe Bell, vice president of IT Solutions and Global Network Architecture, CDK Global. “By adding protective layers of security through integrated visibility and monitoring tools, dealerships can mitigate their risk of lengthy downtime for data recovery.”

IT-related business interruptions can be costly errors for dealerships, impacting businesses an average of 16 days in lost revenue if targeted by a cyberattack. Recovering from a data breach and restoring a dealer’s reputation is both costly and time intensive, and automotive retailers may fall prone to meeting cybercriminals’ demands to keep their dealerships running. In fact, recent data by ransomware specialty company Coveware shows that payouts by businesses nearly quadrupled from 2019 to 2020, jumping from nearly $44,000 to $169,000. CDK’s cybersecurity report highlights the need for dealerships to put necessary preventative measures in place to stem future incidents:

• While dealerships recognize there is an increased sense of urgency to prioritize cybersecurity relative to other operational areas (85%), only 49% believe they currently have adequate protection against cyberattacks.
• Employee email phishing remains the biggest perceived threat to dealer businesses (66%), but less than a third of employees have received formal security training on how to avoid it. Additional concerns include ransomware (48%) and malware (30%).
• A total of 65% of dealerships are regularly backing up data, system images and configurations and keeping the backups offline, but 73% are not testing their cyberattack incident response plan.

“Investing in modernizing aging security products, educating employees on increasingly sophisticated and frequent threats, and solidifying disaster recovery plans before an incident occurs can uphold a dealership’s reputation in the marketplace,” said Bell. “If an automotive retailer’s cybersecurity plan for prevention, protection and response is firmly in place, dealerships can focus on strengthening the consumer buying experience while building trust.”

About the CDK Global Inaugural Dealership Cybersecurity Report

The CDK Global inaugural Dealership Cybersecurity Report was conducted in June 2021 among a national sample of 135 dealerships. The interviews were conducted online by CDK Research & Insights. Participants included dealer executives, IT decision makers and departmental influencers within the dealerships. To view CDK’s Dealership Cybersecurity Report, please visit State of Cybersecurity in the Dealership | CDK Global.

About CDK Global, Inc.

CDK Global (NASDAQ: CDK) is a leading provider of integrated data and technology solutions to the automotive, heavy truck, recreation, and heavy equipment industries. Focused on enabling end-to-end, omnichannel retail commerce through open, agnostic technology, CDK Global provides solutions to dealers and original equipment manufacturers, serving nearly 15,000 retail locations in North America. CDK solutions connect people with technology by automating and integrating all parts of the dealership and buying process, including the acquisition, sale, financing, insuring, parts supply, repair, and maintenance of vehicles. Visit cdkglobal.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211110005208/en/

Media Contacts:

Lisa Finney

248.345.4842

Lisa.Finney@cdk.com

Investor Relations Contact:

Reuben Gallegos

847.485.4012

Reuben.Gallegos@cdk.com

Source: CDK Global, Inc.

FAQ

What did the CDK Global cybersecurity report reveal?

The report highlighted that nearly half of automotive dealers plan to increase cybersecurity investments in 2022, with major concerns including phishing and ransomware.

How many dealers believe they have adequate cybersecurity protection?

Only 49% of dealers surveyed believe they currently have adequate protection against cyberattacks.

What are the financial impacts of cyberattacks according to the CDK report?

Cyberattacks can result in an average of 16 days of lost revenue for dealerships, making recovery costly and time-consuming.

What percentage of dealerships back up their data regularly?

65% of dealerships regularly back up data, system images, and configurations, although many do not test their recovery plans.

What is the biggest perceived cybersecurity threat for dealers?

Employee email phishing, identified by 66% of dealers, remains the largest perceived threat to their businesses.