Three months ago, Hyundai announced that it would start selling new vehicles on Amazon by the end of 2024, enabling consumers to complete end-to-end car-buying transactions on the e-commerce platform.
Amazon doesn’t directly sell cars to consumers; instead, it acts as the platform for completing the final transaction. Hyundai’s dealers must register for the program, list their inventory, and set prices and discounts. After finalizing a sale on Amazon, local dealerships will handle delivery or pickup.
Another crucial detail to bear in mind is that in the USA, states typically mandate that legacy automakers sell cars through franchised dealerships. However, some states have granted exemptions to EV manufacturers like Tesla, permitting them to sell directly to consumers.
Nonetheless, Hyundai’s collaboration with Amazon has been met with dissatisfaction among U.S. dealers.
A survey conducted by Auto News found that most dealers view the plan negatively and believe the collaboration between Hyundai and Amazon will (eventually) lead to more of a direct-to-consumer sales model, something they oppose. In addition, some dealers expressed concern about how the program will impact customer service and could cut into store income derived from trade-ins, finance, and insurance businesses.
Read: Amazon Is Entering The Car Selling Business Starting With Hyundai In 2024
A total of 208 dealers and dealership managers participated in the survey. Over half of them said that the partnership between Hyundai and Amazon represents the first step in eliminating dealers while pushing the industry to a Tesla-like sales model.
The Amazon and Hyundai partnership is already being tested through 18 dealers in select markets, including Los Angeles, Atlanta, Seattle, Denver, and New York. The first sale was made on the platform to a Seattle-based Amazon worker in February who picked up the keys to a new 2024 Hyundai Santa Fe.
Many dealerships believe that customer loyalty will not exist without the conversations that happen with a buyer during the purchase of a vehicle. Many have also raised questions about how the Amazon model will impact the customer relationships which dealers aim to maintain after a sale. They also shared specific concerns related to trade-ins.
Auto News notes that used-car appraisals are an art and dealers who participate in the program with Amazon will need to agree with a trade-in’s assigned value. The retail giant admits that work still needs to be done on the trade-in process. One respondent of the survey expects the partnership between Hyundai and Amazon to fail.
“Purchasing a vehicle is not like purchasing a household good,” they said. “You can’t take your vehicle to Kohl’s and send it back to Amazon if you don’t like it.”
