Amazon Sells Cars Now

Amazon touts itself as the everything store, but there are still markets it hasn’t yet absorbed into its everythingness. Now there’s one less. 

This week, the e-commerce giant launched Amazon Autos, a new wing of its business that lets you buy cars from dealerships. To start off, you’ll only be able to buy Hyundais, because that’s the company that partnered with Amazon for launch, but Amazon wouldn’t be Amazon if it stopped at just one brand.

Wheels n’ Deals

US car dealerships have had a bit of a hard year: Weakening demand prompted many manufacturers and dealers to offer price cuts in the summer, and on top of that a cyberattack hit thousands of dealerships, reducing many to pen-and-paper operations and costing the industry more than $1 billion, according to Anderson Economic Group.

Enter Amazon. The company indicated last year that it was getting revved up about cars. The pandemic saw a trend towards buying cars online, but the momentum of that trend hasn’t really had much staying power, especially since exclusively online car sales companies have had engine problems:

• Used car retailer Cazoo fell into administration — a.k.a., the formal process for handling insolvency for companies in the UK — in May of this year. Cazoo started life as a dealer, but later pivoted to being more of a platform connecting buyers and sellers. Meanwhile, pandemic darling Carvana managed to swerve away from financial oblivion earlier this year.
• Amazon, true to form, is adopting the marketplace model, allowing Hyundai to sell cars through its platform rather than buying and selling cars itself. A selling point for the new service is that Amazon will let prospective buyers do all the financing paperwork online.

Dude, Where’s My Dealership: One car manufacturer that has had success with an online model is Tesla. The EV giant has always favored a direct-sales approach and even fought for the right to do so, legally challenging state bans on direct-to-consumer car sales. Amazon could offer a little of that DTC magic to legacy car brands more used to pure dealership sales — just so long as the cars aren’t delivered in boxes full of puffy plastic bags.