Amazon announced its entry into the brand-new car sales market through a collaboration with Hyundai at the Los Angeles Auto Show. Up until now, only browsing available offers for cars was possible on Amazon’s platform. This partnership marks a new direction as the e-commerce giant extends its reach further into the automotive industry and begins selling brand-new vehicles directly. Furthermore, Amazon’s virtual assistant, Alexa, will be integrated into Hyundai vehicles starting from 2025.
A New Avenue for Automakers
The launch of Amazon’s new car sales marks an opportunity for automakers to tap into a new channel for vehicle purchasing. With the popularity of online shopping continuously increasing, many industries have seen a shift toward e-commerce platforms for business expansion and customer outreach. The automotive industry is no exception—car manufacturers are adapting to the digital age by exploring innovative methods to sell vehicles online beyond traditional dealerships.
Hyundai Leads the Way
South Korean carmaker Hyundai is poised to become the first automaker partnered with Amazon in this new endeavor. As part of the agreement, various Hyundai models will be sold on Amazon’s platform, providing customers with a convenient way to purchase their choice of a brand-new vehicle. With the addition of Alexa integration, the partnership highlights both companies’ commitment to enhancing the driving experience through modern technology.
A Continuation of Amazon’s Automotive Endeavors
Entering the new car sales market isn’t Amazon’s first foray into the automotive world. The company has invested heavily in electric vehicle (EV) startups, including Rivian and Aurora, and has placed massive orders for electric delivery trucks. Amazon’s involvement in car sales may also reactivate its previously launched, then-shelved, vehicle research tool, Amazon Vehicles—a platform that provided information, reviews, and Q&A forums for a range of automotive models.
Impact on Traditional Dealerships
Amazon’s move into new car sales could have significant ramifications for traditional car dealerships. As e-commerce platforms continue to grow in popularity, brick-and-mortar establishments may face mounting challenges in attracting potential car buyers who prefer the convenience of online shopping. Furthermore, as automakers recognize the benefits of listing their vehicles on platforms like Amazon, they may renegotiate or forego their agreements with dealerships altogether.
A Boost for Amazon Prime?
With Hyundai’s brand-new cars available for purchase on Amazon’s platform, there may be potential to boost the company’s flagship subscription service, Amazon Prime. Additional benefits, such as expedited shipping and exclusive discounts, could possibly be extended to include car purchases in an effort to increase Amazon Prime’s value proposition and encourage membership sign-ups.
Online Car Sales Support
As part of the agreement, Amazon will likely provide car purchasing support in various forms for customers. This includes financing options, various payment methods, warranty coverage, and Amazon’s customer service infrastructure. The company could use this new venture to further develop its financial services offerings, ultimately making it easier for customers to complete large purchases such as vehicles through Amazon’s platform.
The Future of Car Sales
Amazon’s entrance into the world of new car sales by partnering with Hyundai signifies a shift toward a more digital, consumer-centric approach within the automotive industry. This development may prompt other automakers to follow suit and establish partnerships with e-commerce giants in search of new growth opportunities. As car shoppers increasingly consider online purchasing channels over physical outlets, the future of automotive sales may very well lie in online platforms such as Amazon.
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