Jeff Bezos started Amazon in 1994 with the idea of selling music and books online. Almost 30 years later he ships almost anything imaginable to all five continents, including cars starting next year. The e-commerce giant took advantage of the Los Angeles Auto Show to announce the initiative together with Hyundai, the first brand to join an agreement of this style in the United States.
The Seattle-based colossus is not new to the car business. It had already launched digital showrooms on its portal to compare models, in addition to selling spare parts and other accessories. However, he had never gotten this far.
The CEO of Amazon, Andy Jassy, indicated that the strategy involves “making it easier for customers to purchase vehicles online”, an agreement that will allow them to make the purchase online and then go pick up the car or request its delivery to their home for a local dealer. Future customers will be able to search for the models available in their area, select the specific features and purchase it as if it were any other transaction on Amazon, including the financing system.
Part of the agreement includes the Alexa voice assistant in all models of the Korean brand from 2025 with the idea of ”simplifying” its use “for entertainment, shopping, smart home settings and calendar consultations, including allowing Hyundai transform your customer experiences and business operations by migrating to AWS (Amazon’s cloud service), Jassy added.
The agreement opens the door to purchasing cars online directly, eliminating the intermediary for traditional brands, that is, the dealers, something that is not contemplated in the agreement at the moment due to legal issues. Hyundai itself has a network of complex relationships with dealers throughout the country that prevents it from completing that intermediate step.
It’s a problem that newer brands like Tesla or Rivian haven’t had to deal with in many parts of the country. They control direct sales online and the stores where they display some of their models, in the case of Tesla.
The news immediately provoked reactions on Wall Street, with a notable drop in the share price of vehicle sales portals such as Carvana and Carmax, with their shares falling by 7% and 6%, respectively.
For Hyundai it is an important step in consolidating its position in the US market, where it already has a 5% share. “Partnering with one of the most customer-centric organizations in the world opens up incredible opportunities as we continue to expand our portfolio,” said Hyundai Motor Company President and CEO Jaehoon Chang. “Amazon is the ideal partner to help make our vision of progress for humanity a reality.”