(CTN News) – In an announcement on Thursday, Amazon said it would allow South Korean automaker Hyundai to begin selling cars through its website by the end of next year.
With the rapid expansion of its digital showrooms on its website, Amazon has slowly been gaining traction in the car-buying market over the years, allowing consumers to research and compare vehicles on Amazon’s site, but not directly buy them from Amazon. On its website, consumers are also able to purchase car products, such as replacement parts, for their cars.
From 2024, Amazon will offer their customers the option to purchase a new car online, pick it up, or have it delivered to their local dealership by their local dealer.
In the next couple of weeks, Amazon will be able to allow customers to search for available vehicles in their area, make a selection, and then proceed to check out using their preferred payment and financing method on the website.
A Hyundai company spokesperson told VentureBeat about the new feature, saying that it is designed to help dealers build awareness of their selection and offer convenience to their customers.
According to Amazon CEO Andy Jassy, the partnership with Hyundai will make it easier for customers to buy their vehicles online. Hyundai will also integrate Amazon’s Alexa voice assistant into its cars starting in 2025 as part of the deal.
Carvana and Carmax, two of the largest online retailers of used cars in the world, saw their shares fall by more than 7% and 6%, respectively, following the news. A 6% plunge in TrueCar stock was also witnessed in afternoon trading as the company’s stock plummeted.
It will be possible for shoppers to buy cars on Amazon as a result of this move, however, the dealer will still be the end seller of the car.
There is a complex relationship between traditional automakers such as Hyundai and dealers that in many states is supported by laws that make it difficult or even illegal for them to bypass franchised dealers and sell new vehicles directly to consumers instead of through franchised dealers.
Tesla and Hyundai other electric vehicle start-ups, such as Rivian, have developed workarounds in many states so that they can sell vehicles directly to consumers online. There are a couple of ways to avoid such laws. They can either originate the sale in a state that does not outlaw the practice, or take legal action to fight the law, as they did in Michigan.
It is apparent that there are less stringent laws regarding the sale of used vehicles in the United States, which makes it easier for companies such as Carvana and others to offer pre-owned vehicles online directly to consumers.