Three months ago, South Korean car manufacturer Hyundai announced that it will start selling new cars on Amazon by the end of 2024, allowing consumers to complete end-to-end car purchases on the e-commerce platform.
Here, Amazon does not directly sell cars to consumers; instead, it operates as an intermediary platform to complete the final transaction. Hyundai dealers have to enroll in the program, list their inventory, as well as set prices and discounts. After completing the sale on Amazon, local dealers will handle the delivery or pickup.
Another important detail to note is that in the United States, states usually require traditional car manufacturers to sell cars through franchised dealers. However, some states have granted exemptions for electric vehicle manufacturers like Tesla, allowing them to sell directly to consumers without going through dealerships.
As a result, Hyundai’s collaboration with Amazon has caused dissatisfaction among many US dealers.
A survey conducted by Auto News showed that most dealers viewed this plan negatively and believed that Hyundai’s partnership with Amazon would lead to more direct-to-consumer sales models, which they opposed. In addition, some dealers expressed concerns about how the program would impact customer service and potentially reduce the income that stores receive from business operations, finance, and insurance.
A total of 208 dealers and dealer managers participated in the survey. More than half of them believed that the collaboration between Hyundai and Amazon represents the first step in eliminating dealerships, while promoting the industry towards a Tesla-like sales model.
The collaboration between Amazon and Hyundai has been tested through 18 dealerships in selected markets, including Los Angeles, Atlanta, Seattle, Denver, and New York. The first transaction was carried out on this platform by an Amazon employee based in Seattle in February, who received the keys to a 2024 Hyundai Santa Fe.
Many dealers believe that customer loyalty cannot exist without exchanges with buyers during the car buying process. Many also question how the Amazon model will impact the customer relationships that dealers want to maintain after the sale.
Reference: Carscoops 
