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Amazon to Introduce Vehicle Purchase Options on US Platform

In a recent announcement by Amazon, the e-commerce giant revealed its plans to facilitate the sale of cars on its platform, allowing car dealers to list and sell vehicles starting next year. Amazon, originally envisioned as the “everything store,” is expanding its product offerings to include automobiles in its online marketplace.

According to Amazon’s head, the initiative is aimed at “changing the ease with which customers can buy vehicles online.” The initial selection will be limited to vehicles from the Hyundai brand.

While online car sales currently represent a small fraction of the overall automotive market, the surge in such transactions during the pandemic challenges the notion that customers would shy away from making significant purchases online. Industry forecasters anticipate a growing role for online car sales in the future.

Alan Haig, President of Haig Partnership, a Florida-based firm specializing in advising on car dealer mergers and acquisitions, noted, “There is certainly a segment of the population, which I believe is growing, which has huge trust in Amazon and other online retailers and they may prefer to never interact with another human being when purchasing a vehicle.”

The involvement of Amazon, a well-established brand in online shopping, is described as “transcendent” by Haig. He emphasized the convenience of having the platform readily available on users’ phones without the need for additional apps.

Amazon’s journey into online car sales began over two decades ago when it invested in an online car-buying site. Several years ago, it introduced an “online showroom” in collaboration with Hyundai, allowing users to browse cars, but the final sale occurred offline at a dealership.

As part of the new deal, Amazon’s virtual assistant, Alexa, will be integrated into new cars from 2025. Hyundai has also entered into a multi-year deal for Amazon’s cloud services.

While the announcement did not provide specific details on the number of participating dealers or the structure of the relationship with dealers, Amazon expects the online car shopping experience to commence in the latter part of 2024.

Customers will be able to search for available vehicles based on preferences such as model, trim, color, and features. The checkout process will enable buyers to complete their purchases online, including payment and financing options. Amazon anticipates that this new shopping experience will enhance dealers’ ability to showcase their selection and provide added convenience to customers.

Despite potential concerns from some dealers about Amazon’s cut of their business and the perceived distance between the platform and the customer, there is acknowledgment that dealers may also benefit from the increased ease of sales and potential advertising cost savings.

Following the announcement, shares in car sellers known for their online presence experienced a decline, with Carvana ending the day down more than 5%.

by Paul Britton

Full-time CBG author covering everything from business to wellbeing news, in Cyprus. and abroad.
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