You can now buy a car on Amazon.com, starting with Hyundai in 2024
Amazon, after expanding its retail empire from books to groceries, is now eyeing the car market. In an announcement on Thursday, the tech giant revealed its plan to allow auto dealers, starting with South Korean manufacturer Hyundai, to sell cars through its platform beginning next year.
According to the report, shoppers will get the choice to either pick up their vehicles or have them delivered by a local dealership. They can browse available cars in their vicinity and then smoothly complete their purchase using their preferred payment or financing method. However, following this announcement, shares of used car dealers took a hit.
Amazon has gradually made inroads into the car-buying domain, introducing digital showrooms on its Amazon.com website for customers to research and compare vehicles. But until now, purchasing a car directly through Amazon wasn’t an option. In addition, customers could also buy car-related products like replacement parts through the platform.
Come 2024, Amazon plans to enable shoppers to buy new cars online, offering the choice of pickup or delivery through local dealerships. Customers can explore available cars in their area, make selections, and complete transactions on Amazon using their preferred payment and financing methods. Amazon sees this as a way for dealers to enhance their visibility and provide added convenience to customers.
CEO Andy Jassy expressed confidence that the partnership with Hyundai will significantly simplify the online car-buying process for customers. As part of this collaboration, Hyundai cars will integrate Amazon’s Alexa voice assistant starting in 2025.
“Hyundai is a very innovative company that shares Amazon’s passion for trying to make customers’ lives better and easier every day,” said Amazon CEO Andy Jassy. “Our broad, strategic partnership should do just that, from changing the ease with which customers can buy vehicles online to making it simple to use Alexa in Hyundai vehicles for entertainment, shopping, smart home adjustments, and calendar checks to enabling Hyundai to transform their customer experiences and business operations by moving to AWS. We look forward to inventing together for many years.”
Following the announcement, the market value of used car dealers like Carmax and Carvana, along with major new car dealers like Lithia Motors and AutoNation, witnessed a decline. Shares of these companies closed down by around 5% to 6% on Thursday, CNBC reported.
It’s worth noting that despite enabling car sales on Amazon, dealers remain the ultimate sellers. Traditional automakers like Hyundai have intricate ties with dealers, often backed by laws in many states that restrict or make it illegal to directly sell new vehicles to consumers, bypassing franchised dealers.
Tesla and other electric vehicle startups, such as Rivian, have found ways around these restrictions in several states, either by starting sales in states where the practice isn’t prohibited or by legally challenging these laws, as seen in Michigan.
In comparison, the regulations governing used vehicle sales are less stringent, making it easier for companies like Carvana to directly sell preowned cars and trucks to consumers online.