Next year, Amazon will launch its new online car-buying service where shoppers will be able to fully complete the transaction of purchasing a new vehicle through the site.
When this service is first launched, only new Hyundai cars will be available, and consumers are supposed to have various financing options if they decide to pursue buying one. Amazon also hopes to expand into selling trade-ins and used vehicles.
However, many car dealers seem to resent the presence of high volume online sales as Amazon would make a considerable amount of money on service and warranty deals that customers agree to when they finance a car purchase.
Yet the manager of a Hyundai dealership in Santa Monica, California, Mike Sullivan, reported that he sees the Amazon partnership as a proactive business step. As though salespeople stand to make half as much with online sales as opposed to in-person ones, the time spent on these sales is expected to be far less, which could potentially lead to increased compensation.
Although another issue is that Amazon will be trying to rebrand itself as a contending car-buying platform, even though it is notorious for its cheap and easily accessible products. Usually, the typical purchase on Amazon is no more than $50, according to a recent survey by Consumer Intelligence Research Partners. The survey also found that only 11% of customers reported spending $1,000 or more on a single item.
Some analysts approximate that two-thirds of customers in search of a car already know what vehicle they want before purchasing, which would make the digital model optimal. But even if Amazon consumers decide to proceed with buying a car online, signing new car manufacturers will be complicated depending on how well the partnership with Hyundai goes, reported Chris Sutton, the Vice President of automotive retail at consumer-data analytics firm, J.D. Power.
Amazon was able to pull in Hyundai by proposing a partnership that included cloud computing, and the advertising/integration of its Alexa technology in their cars beginning in 2025. It also promised to provide dealerships with consumer and performance data.
This is just one of the numerous expansions Amazon has sought out recently, including a partnership with Meta Platforms’ Instagram for product sales.
