Amazon’s New Pilot Program to Sell Cars Online Could Save Drivers Money
CAR DEALERSHIPS are feeling uneasy as Amazon takes steps to revolutionize the car-buying experience by moving sales completely online. In a new pilot program, Amazon has partnered with Hyundai to offer vehicles for sale through its platform. This initiative aims to cater to the increasing demand for seamless online shopping experiences.
The pilot program is similar to Amazon’s existing online shopping tools, which allow customers to purchase groceries, travel packages, and even healthcare products. Unlike platforms such as Carvana, which focus on used cars, Amazon is working with Hyundai to enable customers to buy new vehicles through its platform.
CNBC reports that eight dealership companies, collectively owning 18 dealerships across five states, will participate in the pilot program. These dealerships will gain exposure to Amazon’s vast audience of 150 million Amazon Prime users.
Jeff Dyke, the president of Sonic Automotive, one of the largest dealership companies in the nation, sees this partnership as a brilliant and necessary move. He praises Amazon’s technological sophistication and the strength of its workforce dedicated to this project.
Under this arrangement, Amazon will act as a lead generator, allowing participating dealerships to display their products online for customers to browse and explore. Ultimately, the dealerships will handle the sales, not Amazon. However, anxiety exists among dealerships that Amazon might eventually transition to directly selling vehicles to customers, potentially undermining traditional dealerships.
Amazon CEO Andy Jassy expressed enthusiasm for the partnership with Hyundai, citing their shared passion for improving customers’ lives. He also mentioned their plans to integrate Alexa into Hyundai vehicles for entertainment, shopping, home automation, and more. Additionally, Hyundai aims to enhance its customer experiences and business operations by utilizing Amazon Web Services (AWS).
While traditional dealerships express concerns about the future, some industry players have already made moves towards online-exclusive sales. Companies like Rivian and Tesla solely sell vehicles online, bypassing the dealership model. Amazon’s status as an investor in Rivian adds an interesting dynamic to the automobile industry.
Several automakers intend to transition a significant portion, if not all, of their sales online in response to customer demand for faster and more reliable transactions. Ford Motor Company CEO Jim Farley has announced plans for fixed pricing through online dealerships.
The online car-buying experience will allow customers to conduct shopping, research, and browsing entirely on the web, eliminating the need for in-person assistance. Customers will also be able to apply for financing and explore trade-in values online. Test drives, trade-ins, and signing final paperwork will occur at the participating dealerships.
A recent survey by The Zebra reveals that many car buyers seek a human-free experience to simplify the process. Almost half of the survey respondents preferred shopping alone at dealerships, with only a small percentage desiring assistance from salespeople. Approximately 48% of respondents indicated a preference for initiating the buying process online, including researching different models and specifications. Nearly 30% expressed a desire to complete necessary paperwork online, while 24% believed that price negotiations should be conducted online as well.
The growing popularity of online car buying suggests that Amazon’s pilot program and similar initiatives align with customers’ preferences. However, concerns linger regarding the impact on traditional dealerships and the job security of those employed within them.
In conclusion, Amazon’s new pilot program to sell cars online, in collaboration with Hyundai, reflects the increasing demand for digitized automotive transactions. As customers seek a streamlined and hassle-free buying experience, Amazon’s entry into the car sales market has generated both excitement and apprehension among dealerships. The partnership aims to simplify the car-buying process by leveraging an online platform used by millions, potentially transforming the industry in the process.
