Amazon will now enable car dealers to sell vehicles directly through its platform, a move that will begin with Hyundai, according to a CNBC report. The company has been gradually increasing its presence in the car market by introducing digital showrooms for customers to research and compare vehicles. Starting in 2024, Amazon will allow shoppers to purchase new cars online and either pick them up or have them delivered by a local dealership. This partnership aims to make buying vehicles online more convenient for consumers and will also include integrating Amazon’s Alexa voice assistant in Hyundai vehicles from 2025.
The news of this development caused shares of online used car retailers Carvana and Carmax to drop more than 7% and 6%, respectively, and TrueCar stock also plummeted by as much as 6% in afternoon trading.
This move by Amazon brings some competition to the traditional relationship between automakers and dealers, as in many states, laws and regulations make it complicated or illegal to bypass franchised dealers and sell new vehicles directly to consumers. However, some electric vehicle start-ups such as Tesla and Rivian have been able to develop strategies to sell vehicles directly online in states where the practice is permitted.
Overall, this new feature from Amazon will simplify the process of purchasing a vehicle by offering consumers more options and convenience, supplementing the existing availability for used car sales through online retailers.
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