AutoCanada affected by “cybersecurity incident”

As if the CDK Global outage wasn't enough, AutoCanada is once again struggling with a cybersecurity issue.

The retailer group said it had identified a “cybersecurity incident” that occurred on August 11 and affected its internal IT systems.

In a press release, AutoCanada said that immediately after discovering the incident, the company took “action to protect its network and data” and is working with cybersecurity experts to assist with containment and remediation efforts.

An investigation to uncover the full extent, nature and impact of the incident is still ongoing. The extent to which customer, supplier or employee data was accessed is currently unknown, the company said.

“Although our operations remain open at this time,” AutoCanada said in the press release, “the incident may cause disruptions until the relevant systems are fully restored.”

The latest problem is a major blow to a company still reeling from the effects of the ransomware attack that knocked CDK's merchant software out of service for two weeks in June and early July.

In its second-quarter earnings call this week, AutoCanada reported a net loss of $33.1 million, down 173% from profit of $45 million in the second quarter of 2023, and its adjusted EBITDA of $27 million was down $67 million (71%) year-over-year. Chief Executive Officer Paul Anthony said the CDK issue was one of the significant factors in that decline.

When asked if the new cybersecurity incident was related to the CDK incident, Anthony said it was “too early to say” and the company was still gathering information.

However, he said AutoCanada's response to the current incident was partly driven by the CDK issue.

“It seems like because of what happened with CDK, our team stepped up and started preemptively locking things down to protect the company,” he said. “And I suspect the preemptive locks triggered another event.

“We think it's pretty contained and probably not that big of an impact on the organization, but it's too early to tell. But at first glance, it seems pretty contained.”

AutoCanada operates 84 franchised dealerships in eight Canadian provinces and the U.S. state of Illinois, as well as three used car dealerships, a used car auction business, 13 RightRide division locations and 27 collision centers, including 11 stand-alone locations. The company sold more than 100,000 vehicles in 2023.