[Turbanator]

In 2024, auto dealers for the first time will be able to sell vehicles in Amazon’s U.S. store, and Hyundai will be the first brand available for customers to purchase.

https://www.aboutamazon.com/news/com...ai-partnership

Looks interesting, though the inventories/ sellers will be the dealers, I won't be surprised if this may be tweaked in future like the Mercedes model of Direct sales.

[GTO]

Won't work, at least not the way they are talking about it. Maybe in a few countries, but by and large, it won't work.

Amazon might be the big daddy of e-commerce, yet there are many product categories it has failed in, and where "specialist" websites are better. Car sales are closely guarded by car manufacturers as well as dealerships. It's not like a leather shoe where you can source an alternate version from China.

The OEMs & Car Dealers will only work on their own terms. Over & above, there are several large car startups & independent websites already running at great scale, and with supporting sections (used car listings, review content etc.).

Lastly, Amazon's clunky web interface is more suited to selling charging cables rather than cars.

Amazon's USP today is the widest range of products & excellence in delivery. This doesn't necessarily pose an advantage in the auto retailing world.

[dhanushs]

I'm thinking Amazon will be aiming at late night drunk orders, with no cancellation. .

[GrandTourer]

Not for countries like ours, but think of the Middle East. If malls could sell cars, why not e-commerce.

Skoda and Flipkart had teamed up earlier, where one could pre-book the car and schedule test drives. Of course, one had to then go to the dealership for the formalities, but it provided a good customer acquisition channel.


What Amazon's trying is a bit more ambitious, so let's wait and watch.

[atmosphere]

According Reuters " Amazon will begin selling Hyundai vehicles online in the U.S. starting next year, the two companies said on Thursday.
Customers will be able to shop for, equip and buy a car at Amazon.com and schedule delivery through a local Hyundai dealer, the companies said.
The agreement is an expansion of a deal announced two years ago to expand Hyundai's digital showroom on Amazon.com, enabling customers to configure a vehicle, calculate the price and locate a dealer to complete the sale.

• Customers will be able to search based on model, trim, color and other features, while also choosing payment and financing options.
• Interestingly As part of their deal, Hyundai will begin incorporating Amazon's Alexa voice assistant into its vehicles beginning in 2025.

Also Axiom.com Says "Selling cars online is unlike selling any other item because most product sales aren't as complex as vehicles, which often involve trade-ins, financing, warranties and followup service.
What they're saying: Listing on Amazon "should make shopping easier" for many buyers, "but all these additional components you're still dealing with the dealership," Ivan Drury, director of insights for car-research firm Edmunds, tells Axios.


Keep in mind: Thursday's announcement comes as growth in Amazon's e-commerce business flattens

• What's unclear is how dealers and Amazon will share revenue from sales. The company didn't immediately respond to a request seeking comment.
• "From a Hyundai dealer perspective, it's just like any other transaction," Hyundai spokesperson Michael Stewart said in an emailed response to request for details on how the revenue breakdown works.
• "We aren't providing the financial details of the arrangement, but I can say there won't be a cost to Hyundai dealers," he adds.

The impact: The stocks of several major used car sellers plunged after the announcement.

• Carvana and CarMax ended the session over 5% lower, with TrueCar down 7%, even though Amazon's plans are focused on new vehicles.
• Vehicle sellers "have all said, 'We want to be the Amazon of car buying.' Well, now Amazon is the Amazon of car buying," Drury says.

Worth noting: As a rule of thumb, most automakers aren't allowed to sell new vehicles directly to consumers online because of franchise agreements with dealers.

• Instead, automakers sell cars on a wholesale basis to their dealers, which then sell them to customers.
• One notable exception is Tesla, which doesn't have franchise dealerships and can sell new vehicles directly to consumers.

The bottom line: Amazon is capable of disrupting any industry it puts in its crosshairs, but it can't disrupt the market for new cars without dealerships participating.

[volkman10]

Here's how Hyundai will sell you a car on Amazon.

The Korean automaker has big plans for internet sales on everyone's favorite e-commerce site, but dealers are still involved.

Hyundai Motor America CEO Randy Parker:

"If you want to add accessories, insurance, financing – it's an end-to-end car buying experience 100% on the platform," Parker said. "But if you really want to go kick the tires, you still have the option of going straight to the dealership."

"I don't want people to think this is going to be direct selling from the [automaker] to the to the consumer. It's not." "It's based on the consumer's zip code. That will tie them to the closest Hyundai dealer. But to the consumer, it will be seamless, and that's what's most important."

"The first phase is going to be a pilot, and then after that, hopefully we'll be able to open it up to all dealers,. we are trying to make it easy for the customer to do business with us."

But Parker said the dealers are an important part of their process here, that going through Amazon is a kind of "bridge" between purely online direct sales and the dealer network Hyundai depends on. What's more, he said his dealers are actually excited about this; more of them have indicated they want to sign onto the program.


Link

[Rajeevraj]

If the manufacturers co-operate, I don't see why it cannot work even in India for the popular models. We are also moving to a mode where cars sales are getting commodotized and am sure lot of buyers are predecided on the model they are going to buy and go to a showroom only for the formalities. If Amazon can revamp their site for this segment( which I assume they will do), I think the whole thing can work.

Will of course be a niche sales channel for specific use cases.

[Jeroen]

There is this wonky car manufacturer that has been selling their cars online for a while now. Some people like it, or so it seems. Can’t think what they were called?




Oh, yes. It’s these folks from Tesla that are selling their cars online! Not that I am interested in Tesla’s with their weirdo owner, I would never ever buy a new car online.

But it is definitely a trend in a number of countries/regions. People who are not interested in cars, but still need a car might like it. My dad hated buying cars with a vengeance. He just could not care. He needed a transport pod and could not care less about anything regarding the car itself. He loathed car sales people (ok, I will admit, almost all people do). He could not care about the colour either. My mum had to decide on colour.

As soon as I was old enough he would dispatch me, go get a new car, one that I don’t dislike too much. A sort of very early online shopping experience.

My dad was a bit special, but his approach to car was not. For some folks buying a car should be a as simple and smooth process, requiring minimum effort on their behalf. There is no good or bad, just preference.

I have only bought a car online once. And that was my second hand Jaguar XJR I bought whilst living in the USA. I had spoken to the owner over the phones many times, the car had been checked over, for pre purchase inspection, by a Jaguar dealer. It was advertised on EBay for only ten thousand dollars. But still after all of the work and time I spend on researching the car I found my hand trembling when I tried to punch the “buy now” button.

When you look around on the internet for article on online car buying you will see it is definitely on the rise in a number of countries. It is all about convenience. When done properly it is of course a very convenient way of shopping. Easy to compare prices, clear pricing, no haggling with silly sales people, easy handling of paperwork. Registration and the list goes on. All from the comfort of your home.

As others have pointed out, one of the crucial factors of on successful online spellings is how well the front end and the complete back hand of the process and systems are set up. It takes a lot of hard work. Even the worlds biggest Elon hater will admit that he got online Tesla buying, including the home delivery and over the air updates worked out brilliantly!

Not sure if Amazon is set up for handling a complex product such as a car.

Jeroen

[V.Narayan]

I wonder what is the objective - to increase volumes? open access to a new untapped market? access customers hitherto not reachable? reduce costs? increase margins? make things simpler and more convenient for the customer? I wonder? digitization for its own sake is a poor reason.

A car is usually, for most of us either the most expensive consumer good we buy or if we have purchased a house/flat it is the second most expensive. Would we buy a house without visiting it, studying the drawings, checking the bathrooms etc. Similarly, I suspect most of us would not buy a car without a test drive or better two test drives, kicking the tyres, checking out the interiors getting three other family members involved etc.

This Amazon/on-line scenario could work if like in days of yore there are 2 or at most 3 models each with 3 colours and zero variants. Then maybe the standardization can lend itself to online sales.

Volvo has come up with a IMHO corny scheme of online bookings only. So, after I had done all by checking and testing for my C40 via the dealership I had to go to some site and do the booking. The site IMHO was poorly set up for average IT ignoramuses like me. Maybe it was perfect for the young IT engineer but certainly not for me. So basically, the dealer sat with me and did all the key tapping. Not sure what purpose this served other than irritate a grouchy customer like me literally at the cusp of purchase. Funny thing is that the dealer's men also struggled with the on-line booking!!

[tsk1979]

5 years ago if you have asked me, i would have said it would never work. A car is not a charging cable, or even a refridgerator etc.,
But with dealers in the USA asking for insane markup's people are calling up dealers 2000 miles away and buying cars. I found my 500 miles away (and was willing to go to east coast if necessary).

[shankar.balan]

Originally Posted by Jeroen

Not sure if Amazon is set up for handling a complex product such as a car.

Jeroen

Amazon in this case, will play the role of aggregator platform and the ultimate pre delivery work and delivery work will probably be handled by the manufacturer company or a third party company to whom the manufacturer outsources this.

I think it will be all nice and Novel for some time, much like Uber used to be, with those superb cars and smartypants drivers and all. And then slowly it will all become more and more run of the mill and mass market.

Personally I think it is a great initiative. Provided they can ensure a consistently predictable experience on a long term sustained basis.

Maybe the car manufacturers will also reduce prices considering that they are dispensing with a part of the middle man set up. Servicing of course is another ball game entirely but perhaps they may offer direct to home or partner garage models.

Whatever it is, it will be nice to see how this plays out.

[Jeroen]

Originally Posted by V.Narayan

I wonder what is the objective
make things simpler and more convenient for the customer?

A car is usually, for most of us either the most expensive consumer good we buy or if we have purchased a house/flat it is the second most expensive. Would we buy a house without visiting it, studying the drawings, checking the bathrooms etc. Similarly, I suspect most of us would not buy a car without a test drive or better two test drives, kicking the tyres, checking out the interiors getting three other family members involved etc.

I agree with your sentiments by and large. But the world is changing rapidly.

A couple of quotes from this website:

https://www.statista.com/topics/8240.../#editorsPicks

As of 2021, global automotive e-commerce was valued at a market size of 38.67 billion U.S. dollars and is forecast to spike in the next ten years, up by a compound annual growth rate of 17.5 percent to around 176.24 billion U.S. dollars in 2031. The online automotive aftermarket is also expected to record strong growth. This rise in popularity has been benefiting online automotive marketplaces worldwide, with Cazoo being forecast to record a compound annual growth rate of 209 percent between 2020 and 2022

Note that this pertains to all global automotive e-commerce, not just new vehicle. But still, it is also a market that simply did not exist 10-15 years ago.

On buying new cars online:

The market is not just expanding on computers but also on smartphones, with mobile apps accounting for a significant portion of digital sales. In a 2022 survey, close to 23 percent of respondents mentioned making their automotive online purchases through their mobile phone. Partly because of this ease of access to the market, there are many new entrants from outside the conventional car dealer business, including Amazon Vehicles or China's Autohome platform. Meanwhile, manufacturers of new vehicles have held an online presence for many years and have further digitalized their purchasing services.

Buying cars online offers several advantages over in-person dealerships. Among other things, it is perceived as more convenient for consumers, as it facilitates a flexible car buying experience. Consumers also highlighted the ease of use of e-commerce in six countries surveyed in October 2021, partly due to how accessible online buying platforms are to customers. These benefits of online shopping were even more appreciated by consumers throughout the COVID-19 pandemic when three-quarters of customers intending to purchase a car in the U.S. stated they were considering a contactless delivery of test-drive vehicles important during the pandemic.

The U.S. automotive e-commerce market reported a rapid annual sales growth of over 30 percent year-over-year in February 2022, illustrating the potential of online vehicle and vehicle part sales. However, while consumers recognize the benefits of automotive e-commerce, trust in online marketplaces remains low in the U.S. Online retailers, including online dealerships and automakers, fare better. This is partly due to their established popularity among customers.

A couple of other interesting quotes from Cox, this is USA only, but still

https://www.coxautoinc.com/news/cox-...d-19-pandemic/

As dealers adapted their business due to COVID-19, consumers took advantage of a new digital experience. The overall vehicle-buying process was streamlined by proactive dealer outreach to in-market consumers and new digital retailing tools designed to drive efficiency. As a result, the number of dealerships visited and the amount of time spent in dealerships dropped in 2020. One of the top steps added due to COVID-19 was test drive home delivery. Notably, an estimated 22% of vehicle buyers said they did not test drive a vehicle at the dealership; however, of the buyers who took a test drive, approximately 81% were satisfied with the process, the highest satisfaction rating for any step.

According to the CBJ Study, as the vehicle buying process becomes more efficient, satisfaction levels increase. “Heavy Digital” buyers in the survey – those buyers who performed more than half the steps online – were more satisfied with the process than “Light Digital” buyers, who performed less than 20% of the vehicle-buying steps online. The Heavy Digital buyers reduced their time at the dealership by more than 40 minutes compared to Light Digital buyers, with the biggest time savings delivered in negotiating price and signing paperwork, the two steps that have historically had the lowest satisfaction ratings. The study shows that Heavy Digital buyers were also more likely than Light Digital buyers to trust the deal they received.

From Volvo:

"Globally, we're aiming for half of all our car sales to be online by 2025," Anders Gustafsson, president and CEO of Volvo Car USA, told ABC News.

The pandemic has been a boon for U.S. dealers, which reported record profits in 2020 even with reduced staff and a national recession. Nearly 30% of U.S. new car sales last year were completed online, according to Alan Haig, an automotive retail consultant and president of Haig Partners. Before the pandemic, less than 2% of vehicles were purchased digitally.

"This shift to digital retail is positive for dealers who embrace it," Haig told ABC News. "For those that don't, they will lose customers and be harmed by the trend."

Going digital, be it for information on your new car, comparing prices easily buying spare parts and ultimately a new car is definitely more than a trend. At a volume of 30% it is a real fact of life in the USA and other countries/regions too.

Jeroen

[Jangra]

I hope it works. We buy Refrigerators, Washing Machine, Television going in lakhs. I remember 2016 when Amazon was just picking up, people didn’t trust their money and never bothered to purchase expensive electronics even though it was 20 percent cheaper than the offline purchases. We are 7 year later and I think this is the way ahead.

Rather than putting my money for the booking amount with the dealer who has so many hidden charges for the refund, I would be more comfortable doing these transactions through Amazon. We are underestimating the partnership between worlds largest E commerce giant and automobile manufacturers. Manufacturers know how to produce and Amazon knows how to sell online. THIS WILL WORK

And ultimately it will benefit us! Transparency on offers, online booking cancellations etc. I know there are complications about registrations, test drives, but nothing is impossible!

[GutsyGibbon]

Originally Posted by Turbanator

Looks interesting, though the inventories/ sellers will be the dealers, I won't be surprised if this may be tweaked in future like the Mercedes model of Direct sales.

I know i am talking about US, but snce the news is about US, it may be relevant. In the last 25 years I have bought around 12 cars, most of the early ones were from dealers. I would walk out frustrated dealing with sales and finance guys. Once, I bought my Tesla with no/limited human interaction, I was sold on this path. I swore to never go to a regular dealership.

In 2023 I bought 3 cars. 2 for my kids & one for me. I finalized everything (used cars) looking at online inventory, and relied on fixed online pricing & carmax guarantees. The visit to dealers was super quick to drop-off check to finance guys, and pickup the car, no talking to sales people. Carvana, has a vending machine. The staff at Carmax are only skilled enough to walk you to the car you saw online. Like an Afghan immigrant, who barely knows English, forget cars, or selling stuff, & I love it. I know what car (variant/color) I want, I know what I want to pay, don't bother me, get out of the way. 7 day money back guarantee at Carmax certainly helps for used cars.

I am never ever going to walk into a stealership, like I did 10 years back, and browse cars with an open mind and checkbook.

[Turbanator]

Originally Posted by V.Narayan

I wonder what is the objective

This sums up nicely.

Originally Posted by GutsyGibbon

I would walk out frustrated dealing with sales and finance guys. Once, I bought my Tesla with no/limited human interaction, I was sold on this path. I swore to never go to a regular dealership.

Well said. I absolutely do not want to see the circus these dealerships run. A simple interaction is stretched so much with all type of non-relevant questions/ discussions with only one aim- to earn as much as possible. Now since there are no negotiations on prices, they want to add all fancy extras in terms of giving allocations.

To share a recent experience, we are looking for a car for my wife here in Toronto and the requirements are simple, Cheapest AWD to park at station. Look at one such quote and reply, highlighting some of the laughable/ false info.

Quote..
Hello XXX,

The rust protection has already been applied on the vehicle as the vehicle was made ready for another customer but they were not able to pick it up. Mazda 3 production has been decreasing rapidly, and the next batch is going to be around the 4-6 month mark as there are other waiters for the 2024.

Let me know if you would be interested in the vehicle available or would be interested in having your name on a reserve list.
UnQuote...

As I mentioned, this has to be a success, definitely not with one manufacturer and definitely not with dealers as sellers as in current form. Dealers can be the point of sales, but the rest of everything can be handled better by the manufacturer.