Troubling Outlook for Car Dealerships After Cyber Attack
Here’s another troubling result of the big CDK Cyber attack that hit car dealerships. Analysts from stock market research firms have said that there’s a bleak outlook for car dealers after this Cyber attack.

Impact on Small Businesses After Cyber Attacks
This goes right in line with something we’ve reported on in the last year. According to Inc magazine, 60% of small businesses fold within 6 months after a Cyber attack.

Will Car Dealerships Go Out of Business?
Now, does that mean car dealerships will go out of business? Probably not, but a bleak outlook is not something you want high-level stock analysts talking about for your industry.

Effect on Retail’s Money-Making Sections
It also has an interesting footnote. One money-making section of retail will be hit the hardest.

Focus on Service and Parts
What does that mean? Well, it’s not so much sales that will result in losses. Buried in the article says that the hardest hit from the outage won’t come from showroom and sales floors. It’ll come from service and parts.

Service and Parts Efficiency
Service and parts have a lot higher frequency of transactions. Look, a car dealership might sell 10 cars a day. They might have 40 or 50 service and parts tickets per day, five or six times as many. Each one of those now has to be done on paper.

Long-Term Effects on Sales and Services
Some of those services will never get replaced. People need to buy a car; they’ll probably buy a car later, buy it from somebody else. But service sometimes gets postponed permanently, and parts, maybe they buy from a used part store dealer.

Burden on Service and Parts
Service and parts will bear the brunt of this outage, given the significant efficiency loss. New and used car sales will see a lower impact in the near term.

General Risk of Cyber Attacks
So, even if you’re not in the automobile industry, remember that your business is still at risk for a Cyber attack.

Lessons from the CDK Attack
Even if it doesn’t hit your company directly, remember this CDK attack did not hit car dealerships directly. It hit their vendor CDK, which provides software to dealerships.

Broader Business Vulnerabilities
So, if you’re in your industry and you have a software vendor or provider that issues a platform, an app, data collection for your industry, you might be at risk for the same type of hack.

Hidden Risks in Business Operations
Remember, the areas of your business that are affected the most might not be as obvious. It might be payroll, it might be accounts receivable, it may be inventory management. Those can have the same effect on long-term profitability or even long-term competitive market share than a direct hit on your sales.