Amazon yesterday announced a "strategic partnership" with Hyundai Motor Company that will have it "launching online sale of Hyundai vehicles in the U.S. in 2024, Hyundai naming AWS as its preferred cloud provider to help facilitate digital transformation, and the Alexa Built-in experience coming to Hyundai’s next-generation vehicles."
The company said that "auto dealers for the first time will be able to sell vehicles in Amazon’s U.S. store, and Hyundai will be the first brand available for customers to purchase. This new digital shopping experience will make it easy for customers to purchase a new car online, and then pick it up or have it delivered by their local dealership at a time that works best for them. Customers will be able to search on Amazon for available vehicles in their area based on a range of preferences, including model, trim, color, and features, choose their preferred car, and then check out online with their chosen payment and financing options - all within the Amazon experience they already know and trust. This new shopping experience will create another way for dealers to build awareness of their selection and offer convenience to their customers."
The Associated Press notes that "Amazon did not say how many dealers would be participating in the program or if customers across the U.S. would be able to make purchases. An Amazon spokesperson said the company would release more details as it builds the program, which is expected to begin with Hyundai franchised dealers and launch during the later part of next year."
The AP suggests that the announcement "shows Amazon’s ambitions to grow its footprint through dealers in an industry that has strong lobbying forces and heavy state regulations. Nearly all states require manufacturers to sell their vehicles through dealerships to ensure the automakers don’t undercut their own network of franchised dealers.
"Despite its vision, Amazon might face challenges convincing consumers who might not feel comfortable making such a large purchase on its platform. In a statement, an Amazon spokesperson said customers are increasingly purchasing vehicles online and the company will provide a 'range of solutions that add transparency' to the car buying process to help them make an informed decision."
- KC's View:
I may be wrong about this, but it seems to me that this is not the first time Amazon has considered getting into the car business.
Regardless, I think this is an interesting move, though one that will not address some of the issues that car buyers face. Not sure about you, but my experience with local dealerships is mixed. I love my Mustang, but hate the local Ford dealer - if I were going to use Amazon to buy a car, one of the advantages should be the ability to access the dealer network beyond my local area.
I understand why this would be difficult for Amazon - in this care, Hyundai
wantsneeds to protect its local dealers, at least if wants their participation. Though maybe it also could use expanded dealer access as a way to bludgeon the local guys into better service.
The expectation seems to be that Amazon will expand this arrangement to other automobile brands, and the real key for Amazon seems to be embedding Alexa-powered systems in an expanding network of cars, which will enable folks to place more orders on Amazon and Whole Foods.