Amazon is about to add cars and SUVs to the huge list of things it sells online. People will be able to shop for Hyundai vehicles on Amazon through an agreement with the South Korean automaker.
However, your new Hyundai Santa Fe or Sonata won’t be delivered to your front door in a gray van. Once you have selected your vehicle from the local Hyundai dealer’s catalogue, you will take the car to the dealership, just like any other customer purchasing a car.
Laws in most US states protect auto dealerships from automakers who want to sell directly to consumers. Being able to buy a car virtually online has been a source of controversy for Tesla, Rivian and other automakers that prefer to deal directly with customers.
“It’s not like you’re going to buy it, and then the next day the car will be delivered to your house, like you’re a Prime member or something like that,” said Jessica Caldwell, industry analyst for Edmunds.com. , “If that’s the expectation then it needs to be managed, because I think it’s going to cause a lot of consumer disappointment.”
However, an Amazon spokesperson said that Amazon would aim to make the experience as seamless and “like buying a car on-line” as possible.
Edmunds.com is, in a sense, a competitor because its website also makes money by connecting car buyers with dealers. That’s essentially what Amazon will do with Hyundai dealers.
He points out that buying a car is also a very different and much more complex transaction than buying a book or watch online. For example, according to Amazon, the Amazon website will provide information about financing and allow customers to calculate monthly payments. A lot will depend on how well the interface is designed, Caldwell said.
In a presentation at the Los Angeles Auto Show, Hyundai Chief Operating Officer Jose Munoz and Hyundai Santa Monica dealership owner Mike Sullivan also said the dealerships will take on the task of explaining vehicle technologies to customers. Besides, the vehicles are also serviced after they are sold.
Amazon customers will be able to search dealership inventory, see the price of vehicles, and click a button to start shopping through the Amazon website. Customers will be able to choose from only those vehicles that are already in the dealers’ inventory.
Being able to select a vehicle online in itself is nothing new. Many auto dealers have long been using a variety of e-commerce platforms to help increase sales.
This is something that intensified during the peak of the Covid pandemic, when car buyers were not always able to reach dealerships in person. “Lead generation”, where websites earn commissions for connecting buyers to auto dealerships, is a business model that has been used by many of my websites.
“I’ve been doing home delivery and e-commerce for 30 years,” Sullivan said during the presentation.
He acknowledged that the real success in this arrangement was due to the size and scope of Amazon, one of the largest e-commerce giants. Companies in the world. Hyundai was announced as the first car company but Amazon may work with other automakers in the future.
The arrangement was announced as part of a package of deals between Hyundai and Amazon, in which Amazon will provide data storage for Hyundai and include the Alexa voice assistant in future Hyundai models.
Hyundai dealers will not be required to participate in the program, but they can opt in.