Why Amazon and Hyundai could be a threat to car sales at dealerships?

The global business giant will offer vehicles that can be picked up at a single point or delivered to your home like any other product.

Amazon wants to firmly enter the automotive industry in the United States. A sector valued between $2.5 and $3 billion, according to the National Automobile Dealers Association. For this reason, it has already launched its plan to sell Hyundai-designed cars online and in physical dealerships, a model that could represent great challenges in the future.

since December The e-commerce platform is selling vehicles to a small number of users, who are currently only employees of the South Korean company. As part of a pilot program to expand it to larger groups.

Jeff Dyke, president of Sonic Automotive, says in a CNBC report Cars are one of the most requested products among Amazon’s nearly 150 million Prime customers.

Additionally, Chris Sutton, vice president of automotive retail at J.D. Power, says 25% to 30% of car buyers want to do part or all of the purchasing process online. When it comes to the segment of electric vehicle buyers, this figure increases to 40%. Which represents an opportunity for the company created by Jeff Bezos.

Amazon and Hyundai launch strategic partnership that will include vehicle sales in 2024. (Amazon)

While some companies, primarily electric vehicle makers like Tesla and Rivian, avoid focusing on dealerships and sell new vehicles through their own websites, and companies like Carvana sell used cars online, Internet shopping still represents a relatively small share of total sales.

Dealers, on the other hand, who must comply with a long list of state laws, They can’t replicate the speed of the purchasing process on the web, in which one click defines the entire sale., benefits to consumers. Which may pose a threat to your business model in the future.

However, heLeaders in the sector in the United States are skeptical that Amazon can overcome the challenges that have hindered other companies in online sales processes in the past. And this poses no threat to their business model.

For example, Dyck believes that concerns about the dangers posed by online car sales are “absurd” and, conversely, he believes that Amazon’s arrival will “in terms of the personnel working on this project, the sophistication And brings a level of technology.” Which is unlike anything I’ve ever seen.”

Selling cars online is an opportunity for Amazon that only Tesla has been able to take advantage of. (Reuters)

As part of the agreement, Hyundai has chosen Amazon Web Services (AWS)The Amazon unit is dedicated to providing computing services as its “preferred cloud provider” to “accelerate digital transformation.”

The South Korean manufacturer noted that with the agreement AWS This will make it “a more data-oriented organization with a cloud-first technology strategy.”

While future Hyundai cars starting from 2025 will have access to Alexa And they will be able to do voice control from the vehicle.

And users will also be able to control them smart home From the street, such as checking doors are locked and managing smart lighting and routines.

“Our broad, strategic partnership should do just that, from transforming the ease with which customers can purchase a vehicle online to simplifying the use of Alexa in Hyundai vehicles for entertainment, shopping, smart home adjustments and calendar checking; “Enabling Hyundai to transform its customer experience and business operations by migrating to AWS,” he concluded. andy jessie From Amazon.

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