Amazon is getting into the car-selling business thanks to a strategic partnership with Hyundai and its dealerships. This move sidesteps current state laws that ban direct-to-consumer (DTC) car sales, but is also something we think benefits the two corporations more so than its consumers. After all, who wants a middleman to the middleman?
At the LA Auto Show this week, Amazon and Hyundai revealed a new partnership that basically enables the Korean automaker’s dealerships to sell their vehicles on Amazon’s US digital storefront, from choosing trim, color, and features, to choosing payment and financing options.
Up till now, Amazon had merely featured virtual showrooms and price comparison tools for some car makes, but with this announcement, Amazon can feature Hyundai vehicles on its site where potential buyers customize their vehicles and payment options, then get directed to their nearest dealership to close the deal.
In turn, Hyundai has agreed to use AWS (Amazon Web Services) for its cloud services and incorporate Alexa into its vehicles by 2025. Andy Jassy, Amazon CEO proclaimed that the partnership would improve customers’ experience, “from changing the ease with which customers can buy vehicles online to making it simple to use Alexa in Hyundai vehicles for entertainment, shopping, smart home adjustments, and calendar checks to enabling Hyundai to transform their customer experiences and business operations by moving to AWS.”
Currently, 48 US states prohibit or limit automakers to sidestep dealerships to sell direct-to-consumer. BTesta has been able to do that for the most part because it no independent dealerships. Amazon’s strategy keeps the company on the good side of the law by ensuring the dealership remains part of the process.
Besides Hyundai using AWS and Alexa as part of the agreement, it’s undisclosed if Amazon will get a cut of sales. One thing’s for certain though, linking the car-buying experience and process between the shopper and dealer allows Amazon to collect buying pattern data and make more granular product recommendations, such as accessories or maintenance items.
Hyundai’s Amazon storefront is slated to go live some time in 2024. Will other automakers follow suit? Only time will tell.