Breaking the traditional distribution model! Hyundai Motor wants to "sell cars online" on Amazon.
Modern has become the first car manufacturer to allow consumers to buy cars on e-commerce platforms. This plan will be implemented next year.
The convenience of shopping without leaving home is about to add another big item for American consumers: buying cars on Amazon.
On Thursday local time, at the Los Angeles Auto Show, South Korean automaker Hyundai announced that starting in 2024, Hyundai's US dealers will be able to sell new cars on the partner platform Amazon. Hyundai is the first car company to allow consumers to buy cars on an e-commerce platform.
By next year, consumers will only need to search for available car models, colors, and features of local dealerships on Amazon, and then choose their payment method and financing plan online to either pick up the car themselves or request home delivery.
Jose Munoz, Chief Operating Officer of Hyundai, said at the Los Angeles Auto Show:
"Despite continuous improvements in the car buying experience, customers are still dissatisfied with the process. They see how easy it is to buy other products on Amazon and hope to enjoy the same convenience when buying a car."
In addition, as part of the collaboration, Hyundai will also adopt Amazon's Alexa technology in its vehicle models starting in 2025.
Hyundai expects that initially only 15 to 20 dealerships will be able to sell cars on Amazon, but this number will expand to more dealerships by the end of next year.
Furthermore, Amazon also pointed out that by the end of 2024, more and more car companies are expected to start selling cars through the Amazon channel.
In recent years, consumers have begun to accept the idea of bypassing car dealerships, especially when it comes to newer electric vehicle models.
A study by industry research firm Cox Automotive showed that in 2022, there were more electric vehicle buyers willing to purchase cars entirely online compared to traditional gasoline vehicle buyers. Researchers also found that customers who were able to complete most of the car buying process online were the most satisfied among all buyers.
Tesla, the leader in the electric vehicle market, was the first in the industry to adopt a direct-to-consumer sales model, and competitors such as Rivian and Lucid have also adopted this approach. These companies rely less on traditional car dealerships.
Even traditional automaker Ford Motor emphasized that adopting a direct sales model and abandoning dealerships can save an average of $2,000 per vehicle. Ford Motor is organizing sales channel reforms and plans to provide more flexible online purchasing services for electric vehicle customers starting next year, including transparent pricing and remote vehicle delivery.
The collaboration between Hyundai and Amazon represents a self-rescue move for dealerships to adapt to the new era. Both Hyundai and Amazon have pointed out that online car buying can create avenues for dealerships to increase the visibility of their products and provide customers with convenient purchasing options.