Amazon is about to add cars and SUVs to the huge roster of things it sells online. People will be able to shop for Hyundai vehicles on Amazon through an agreement with the South Korean automaker.
Your new Hyundai Santa Fe or Sonata won’t be delivered to your front door in a gray van, though. Once you’ve selected your vehicle from a local Hyundai dealer’s inventory, you’ll pick up the car at a dealership, just like any other time a customer purchases a car.
Laws in most US states protect auto dealerships from automakers who might want to sell directly to consumers. Being able to literally buy a car online has been a source of contention for Tesla, Rivian and other automakers that prefer to deal directly with customers.
“It’s not like you’re going to buy it, and then the car will be delivered to your house the next day, like you’re a Prime member or something like that,” said Jessica Caldwell, an industry analyst with Edmunds.com. “If that is the expectation then that needs to be managed, because I would imagine that would lead to quite a bit of disappointment on the consumer end.”
Amazon’s goal will be to make the experience as seamless and as much like “buying a car on-line” as possible, though, an Amazon spokesman said.
Edmunds.com is, in one sense, a competitor since its website also earns money by connecting car shoppers with dealers. That’s essentially what Amazon will be doing with Hyundai dealers.
Buying a car is also a very different and far more complex transaction than buying a book or a watch on-line, she pointed out. The Amazon website, for instance, will provide information about financing and allow customers to calculate a monthly payment, according Amazon. A lot will depend on how well that interface is designed, Caldwell said.
In a presentation at the Los Angeles Auto Show, Jose Muñoz, chief operating officer of Hyundai, and Mike Sullivan, owner of the Hyundai Santa Monica dealership, also noted that dealerships will handle explaining vehicle technologies to customers as well as servicing the vehicles once they’re sold.
Amazon customers will be able to search dealership inventories through the Amazon website, see pricing for vehicles, and click a button to initiate a purchase. Customers will only be able to select from vehicles that are already in dealers’ inventories.
In itself, being able to select a vehicle online is not new. Many auto dealers have been using a variety of e-commerce platforms to help generate sales for a long time.
It’s something that accelerated during the height of the Covid pandemic, when car shoppers weren’t always able to get to dealerships in person. “Lead generation,” where websites earn a commission for connecting shoppers with auto dealerships, is a business model that has been used by my many websites.
“I’ve been doing home deliveries and e-commerce for 30 years,” Sullivan said during the presentation.
He acknowledged that the real breakthrough in this arrangement was simply the size and scope of Amazon, one of the largest e-commerce companies in the world. Hyundai was announced as the first car company but Amazon may work with other automakers in the future.
This arrangement was announced as part of a package of deals between Hyundai and Amazon, including that Amazon will provide data storage for Hyundai and that future Hyundai models will include the Alexa voice assistant.
Hyundai dealers won’t have to participate in the program, but can opt-in.