Amazon has revealed plans to venture into online car sales starting next year. This new service will enable U.S. customers to select, customize, and purchase vehicles, with the option to arrange delivery through a local dealership.
Marty Mallick, Vice President at Amazon, highlighted that this initiative is focused on simplifying the vehicle purchasing process online for customers.
Initially, the online car sales platform will feature Hyundai models, with the service set to launch in the latter part of 2024, according to Amazon.
Consumers will have the opportunity to choose from a range of models available in local dealerships’ inventories and select financing options through Amazon.com. Following the purchase, customers can either collect their vehicle from the dealership or opt for home delivery.
Following the announcement, shares of traditional and competing car dealerships experienced a decline. Carvana, an online used-car retailer, saw its shares plummet by up to 9% on Thursday. Similarly, stocks of CarMax, AutoNation, and Asbury Automotive Group also witnessed a downturn.
This trend emerged in the wake of Covid lockdowns, which hastened the transition to online car buying. Automakers are capitalizing on the shift towards electric vehicles as a chance to digitalize the car sales industry.
Market analysts anticipate that online car sales will soon constitute a significantly larger segment of the overall market.
The recent agreement represents an expansion of a partnership initiated two years ago, aimed at enhancing Hyundai’s digital showroom on Amazon.com, a project that began in 2018.
As part of this collaboration, starting in 2025, new Hyundai vehicle owners will have the ability to use Amazon’s Alexa voice assistant directly from their cars.
The companies, in a joint statement, expressed that this novel shopping experience will offer dealers a new avenue to showcase their inventory and provide added convenience to their customers.
Over the years, Amazon has rolled out various features to attract consumers interested in purchasing and maintaining vehicles. Its “Your Garage” feature allows customers to save their car details, simplifying the search for compatible parts and accessories. Additionally, Amazon offers a service where customers can purchase tires and connect with local installation services.
While Hyundai is optimistic that Amazon’s platform will enhance its sales, the company remains committed to the dealership model, recognizing its crucial role in vehicle servicing, according to a spokesperson.
Amazon’s stock saw a slight decrease of 0.26% at Thursday’s close but experienced a modest rise in after-hours trading.
