Amazon’s shopping experience has increased competition in key consumer markets beyond traditional bricks and mortar retailers and “discounters”.
Vehicle manufacturers, and their dealers, have been fighting against online ecommerce shopping in many ways. It was believed the “showroom experience” was essential to motivating buyers to close purchases. GM experimented with the Saturn product lines with fixed-pricing (“no negotiations”) and a limited catalog of options. Consumer behaviors, and preferences, have changed. Many consumers now go online to price, compare, and configure their purchases. Dealerships’ economics have seen major impacts from Covid-19 and changing buyers. A high percentage of younger buying demographics (especially women) are repulsed by the dealership sales tactics and methods. Manufacturers sought to widen their marketing impacts by more sophisticated websites and online user experiences. All of these trends are combining to create a fundamental change in the vehicle sales marketplace
Tesla’s online sales are reckoned by traditional car executives are being far less costly than the dealership models. (USD$1-3K per vehicle) Now, in a major departure, Hyundai has agreed to partner with Amazon to sell Hyundai vehicles. Consumers will be able to research, configure, price, and buy a Hyundai vehicle starting in 2024. Delivery will be via a local dealership. This expands on the Hyundai “Evolve Showroom” that has been maturing since 2018 on Amazon. The expanded concept will include the vehicle, accessories, insurance, and financing (including leasing) within the Amazon marketplace. It is unclear how dealers will be compensated for just the destination, dealer preparation, and delivery functions. Hyundai EV/NEV product lines will also be available directly from the Amazon marketplace in competition with the Tesla online sales. The competitive partnership with Amazon could be a template for other manufacturers.
The Chinese vehicle manufacturers have been exploring launching into the USA marketplace for several years. BYD, already the largest EV/NEV manufacturer in China, has a small USA vehicle operation (busses) without a major dealership network. Amazon could be the ideal online ecommerce website in direct competition with traditional global manufacturers. Amazon could support fulfillment operations, parts supply chains, customer experiences online, and many other operational requirements to launch in the USA marketplace. Amazon already has experience with “oversize” items in its dedicated fulfillment and warehousing network. A successful template could reduce time for a USA launch to months from years for a foreign manufacturer.
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