Amazon, originally envisioned as the “everything store,” is expanding its online marketplace to include a new category: cars.

Starting next year, customers in the United States will have the opportunity to explore and purchase vehicles directly from dealers on Amazon, as revealed in an official announcement by the company.

This strategic move aims to revolutionize the online vehicle purchasing experience, making it more convenient for customers.

The initial selection will focus on the Hyundai brand, with plans to broaden the offerings over time.

While online car sales constitute a small fraction of the overall automotive market, the surge observed during the pandemic challenged the assumption that consumers would shy away from significant online purchases.

Analysts anticipate a growing role for online transactions in the automotive industry in the coming years.

Alan Haig, President of Haig Partnership, a firm specializing in car dealer mergers and acquisitions, highlighted the significance of Amazon’s involvement.

He noted that the trust established by Amazon as a major online retailer, coupled with the ease of access via smartphones, makes this announcement particularly noteworthy.

Amazon’s journey into the realm of online car sales dates back more than two decades when it initially invested in an online car-selling platform.

The recent collaboration with Hyundai aims to not only enhance the car-buying experience but also integrate Amazon’s virtual assistant, Alexa, into new cars from 2025.

Additionally, Hyundai has entered into a multi-year agreement for Amazon’s cloud services.

While specific details about dealer participation and the structure of their relationship with Amazon remain undisclosed, the company expects the online car shopping experience to commence in the latter part of 2024.

Customers will have the ability to search for available vehicles based on various preferences, choose their desired car, and complete the transaction online, including payment and financing options.

Though some dealers may express reservations about the potential impact on their business, concerns about Amazon’s share of profits, and the perceived distance between dealers and customers, the move is anticipated to benefit dealers as well.

Increased sales frequency and potential cost savings on advertising could offset initial apprehensions.

The announcement had a noticeable effect on the stock market, with shares in online-centric car sellers, such as Carvana, experiencing a decline of over 5% by the end of the day.

Last Updated : 17 November 2023