Amazon will start selling cars online from next year, the retail giant has announced.
Customers in the United States will be able to select, customize and purchase a vehicle and schedule delivery through a local dealer.
Marty Malik, Amazon’s vice president, said the move was aimed at “transforming the ease with which customers can purchase vehicles online.”
Amazon said the online selection will initially be limited to Hyundai vehicles and will launch in “late 2024.”
Buyers will be able to select models from local inventory and choose financing options from Amazon.com. They can then pick up the car from the dealership or have it delivered to their home.
Amazon’s Marty Malik and Hyundai’s Jose Munoz announce deal in Los Angeles – Getty Images
Shares of rivals and traditional car dealers fell after the announcement. Carvana, the online used car retailer, fell as much as 9 percent on Thursday, while shares of CarMax, AutoNation and Asbury Automotive Group also fell.
This comes as the Covid lockdown has accelerated the shift to online vehicle purchasing and carmakers have seized the electric vehicle transition as an opportunity to digitalise car retail.
Analysts predict that online sales will soon become a larger share of the market.
The agreement is an extension of a deal announced two years ago to expand Hyundai’s digital showroom on Amazon.com, which the companies launched in 2018.
The partnership will enable buyers of new Hyundai vehicles in 2025 to access Amazon’s Alexa voice assistant from their cars.
“This new shopping experience will create another way for dealers to create awareness of their selection and provide convenience to their customers,” the companies said in a joint statement.
Amazon has introduced a variety of features over the past few years aimed at attracting customers looking to buy and repair cars. Its “Your Garage” feature saves the make and model of customers’ cars making it easy to find parts and accessories. Buyers can also purchase tires on Amazon which will connect them with a local installation service.
A spokeswoman said Hyundai expects Amazon’s platform to help drive sales, but will continue to favor the dealership model because of their important role in vehicle service.
Amazon shares closed 0.26 percent lower on Thursday, but rose slightly in after-hours trading.