You can now buy a new car on Amazon, as long as it’s a Hyundai
- You can now buy new vehicles and trade in old ones through Amazon Autos
- It will initially be available in 48 cities in the US
- More car brands will join the platform next year
The world’s largest online shopping marketplace announced it was working with Hyundai to start selling its vehicles late last year, with Amazon users able to view models and register interest but not physically purchase them.
Now Amazon has announced that Amazon Autos (Beta) is now open for business in 48 US cities. This service allows buyers to browse vehicles at their leisure, pay with a customized financing option (or pay cash if you’re a baller) or select optional protection products. You can go to a local dealer to pick up the car or have the shiny new car delivered.
The overall idea is to beat Tesla at its own Direct-to-Consumer (DTC) game by offering a convenient sales channel that bypasses the need to sit in a cramped dealership and negotiate with a salesperson over the sometimes-inflated price.
According to many Cox Automotive Studiesasking customers about their car buying experience, overall satisfaction with the traditional dealership model in the US is declining. However, Fan Jin, global head of Amazon Autos, said the new online platform makes shopping for a new car more transparent, convenient and customer-friendly.
By combining a number of online car buying tools into a single online destination, Amazon Autos allows customers to get an “instant valuation” of their existing used vehicle, with the option to trade it in for the price of the new car.
Although the final valuation of the used vehicle will be determined by an independent third party.
Currently, Amazon Autos only lists select Hyundai vehicles, mainly the Ioniq 5, although the brand says it plans to roll out new models and offer additional car brands next year, while potentially expanding its business model to areas outside the US.
Analysis: Just another window dressing
Steven Suh, general sales manager of South Bay Hyundai, said in a statement that Amazon Autos “allows us to expose our vehicles to millions of everyday buyers,” showing that customers are “coming in excitedly to pick up their new car.”
So as new as it may seem, Amazon Autos is just another online storefront where a customer will eventually set foot in a local dealership, either to pick up their vehicle or when they eventually need to return for servicing, repairs and routine maintenance .
Sure, it avoids the tough initial negotiation with a salesperson, but it still doesn’t completely eschew a “legacy” dealer model.
Second, Amazon doesn’t clarify how a test drive would work, with interested parties likely contacting a local dealer through the online marketplace to schedule some time with the vehicle. Free returns and Prime delivery don’t really work for something as big and expensive as a car.
Unfortunately, Tesla has been successful with its offering of mobile technicians and the automation of its maintenance schedules and routine maintenance. Remote diagnostics allow its technicians to troubleshoot problems from anywhere in the world and if a vehicle absolutely requires a visit to a shop, Tesla will recommend and book you through one of its trusted local repairers.
As electric vehicles require less frequent maintenance due to a reduction in the number of mechanical parts, an increasing number of manufacturers are looking for easier ways for customers to interact with their products.
Tesla has proven that you don’t necessarily need a network of dealers to be successful, while Hyundai is clearly testing the waters to see if they too can future-proof its brand with an increasingly digital offering.
