Hacks on Vehicles Jeopardize Customer Loyalty for Auto Makers

Computer hacker attacks on auto maker products are among the biggest threats to customer loyalty. A study by the tax and advisory firm KPMG found that nearly 80% of consumers said if their vehicle fell victim to cyber tampering, they would be less likely to buy another car from that company; 10% added they would abandon their brand loyalty altogether.

The 2016 KPMG Consumer Loss Barometer study found that half of buyers are not concerned about a cyber attack on their current vehicle, but 70% are worried about the vulnerability of the car they will drive in the next five years.

KPMG attributed the increased concerns to the emergence of connected autonomous vehicles. Some semi-autonomous vehicles already are on the market, and the first fully self-driving cars could be available as early as 2021.
“With cars hooked up on a network, the prospect of a hacker taking over the vehicle concerns some consumers,” the report said.
Auto manufacturers do not appear to share their customers’ worries.

Eighty-five of 100 senior automotive cyber security executives surveyed said their organization has been breached within the past two years. But only 68 say capital funds have been invested in information security, and only 45 said their company had a full-time employee dedicated to computer security.
“An attack can take many forms either against the vehicle, the auto manufacturer and/or the customers and their personal information,” said Gary Silberg, KPMG automotive sector leader. “The first example, where a cyber-attack is carried out against the vehicle, has been demonstrated at hacker conferences the last couple years. In this scenario cyber actors can take remote control of a vehicle to kill the engine or control the air conditioning in a car. Last year, research that showed this scenario is plausible caused one auto manufacturer to recall 1.4 million vehicles so they may have a cyber-security update installed to prevent the remote takeover of the vehicle.”

Silberg said that in the second example auto manufactures and their suppliers are regularly targeted by cyber threat actors that are interested in stealing their intellectual property, merger and acquisition information, employee and customer data, banking data, hacking procurement and payroll systems.

“In short, they are targeting these corporations for anything of fungible value on the cyber underground or for wire transfer fraud,” he said.

Karine Del Moro, Vice President of Marketing for Confirmit, told Loyalty360 that the survey highlights the importance of companies communicating that customer concerns are understood. Confirmit offers a flexible, multichannel software platform for customer experience, employee engagement and market research programs.

“Until very recently, cyber security wouldn’t have been on car manufacturers’ radars, but clearly it’s an issue of concern to motorists now,” Del Moro said. “Businesses who take a proactive approach to capturing customer feedback and opinion will be well-placed to take action that ensures customers feel their needs are being met which will help to build a stronger relationship and foster loyalty.”

Silberg said hacking a vehicle or a retail company both requires similar effort. To hack a vehicle, he said one would need to have knowledge of the systems in the vehicles.

“Cars and trucks have evolved into highly complex computers on wheels, with increased connectivity that presents cyber security risks, the most significant of which is safety,” Silberg said. “Auto manufacturers and their supplies are now realizing the cyber risks. In response, they are building cyber security into their overall risk governance approach to ensure that the supply chain, design and manufacturing process and services have cyber security imbedded into the whole life cycle,” he said. “In some cases they have even offered hacking bounties of thousands of dollars for anyone that can hack their vehicles. Automakers realize the threat is real and the implications of a vehicle breach could be disastrous both automakers and consumers alike.”

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