Amazon will begin selling vehicles to customers in the United States starting next year, the company has announced.
The company unveiled its plans on Nov. 16 during the 2023 Los Angeles Auto Show, noting that the new additions to its online shopping site will make it “more convenient” for customers to find and buy their vehicle of choice and pick it up from their local dealer.
The e-commerce giant revealed that Hyundai would be the first brand to sell cars on the platform, starting in the second half of 2024, with other brands following suit later in the year.
“Hyundai is a very innovative company that shares Amazon’s passion for trying to make customers’ lives better and easier every day,” Amazon CEO Andy Jassy said in a statement.
“Our broad, strategic partnership should do just that, from changing the ease with which customers can buy vehicles online, to making it simple to use Alexa in Hyundai vehicles for entertainment, shopping, smart home adjustments, and calendar checks, to enabling Hyundai to transform their customer experiences and business operations by moving to [Amazon Web Services (AWS)]. We look forward to inventing together for many years.”
Under the new partnership between Amazon and the Korean automaker, customers will be able to purchase a new vehicle online, and then either pick it up or have it delivered by their local dealership at a time that works best for them, officials said.
‘New Shopping Experience’
“This new shopping experience will create another way for dealers to build awareness of their selection and offer convenience to their customers,” Amazon stated.The agreement is an expansion of a deal announced two years ago to expand Hyundai’s digital showroom on Amazon.com. Hyundai set up its first digital showroom on Amazon in 2018.
Under the newly announced deal, Amazon’s virtual assistant, Alexa, will be integrated into Hyundai’s next-generation vehicles, starting in 2025. Hyundai also signed a multiyear deal with Amazon’s cloud computing unit, AWS.
Amazon didn’t say how many dealers would participate in the new shopping experience or how the retail giant and dealers would share in revenue from the sales. The company plans to reveal more in the weeks to come.
“We aren’t providing the financial details of the arrangement, but I can say there won’t be a cost to Hyundai dealers,” Hyundai spokesman Michael Stewart told Axios.
Pandemic Prompts Increase in Online Car Sales
Amazon already sells vehicle equipment and accessories online and operates “Amazon Vehicle Showrooms,” allowing consumers to research various types of vehicles. However, up until now, it hasn’t allowed customers to purchase vehicles directly from its platform.Generally speaking, most automakers in the United States aren’t allowed to sell new vehicles directly to consumers online because of franchise agreements that protect auto dealers.
However, experts have noted a rise in consumers purchasing cars online, prompted by the COVID-19 pandemic, when dealerships were shut down.
Purchasing a brand-new vehicle online, however, still carries some risk for customers, and Amazon could well face challenges when it comes to convincing consumers who might not feel comfortable making such a large purchase on its platform.
Still, during the Nov. 16 presentation, Jose Muñoz, chief operating officer of Hyundai, and Mike Sullivan, owner of the Hyundai Santa Monica dealership, said dealerships will be the ones to explain vehicle technologies to customers and will serve the vehicles once they have been sold, CNN reported.
Hyundai dealers won’t be required to participate in the program and can instead opt-in, officials noted.
“Partnering with one of the world’s most customer-centric organizations unlocks incredible opportunities as we continue to expand our portfolio, grow our sales network, transition to electrification, and realize the future of smart mobility,” Jaehoon “Jay” Chang, president and CEO of Hyundai Motor Co.
“Amazon is the ideal partner to help realize our vision of progress for humanity, including improving how people and goods move more efficiently and sustainably.”
