It was bound to happen eventually. In the latest episode of expanding automotive retail channels, Hyundai says customers will soon be able to buy its vehicles online at Amazon, and then pick them up at their local dealer.
Hyundai will switch to AWS, Amazon’s cloud-computing division, as part of the deal. Hyundai is also adding the Alexa built-in experience to its vehicles beginning in 2023.
Hyundai, which made the announcement at the Los Angeles Auto Show, has been working closely with Amazon for some time. In 2021, the two companies announced an expanded digital showroom on Amazon, allowing people to begin the vehicle selection process directly on the ecommerce giant’s website.
That innovation lets customers configure and estimate the price of their desired Hyundai vehicle, find the car in real-time inventory and then contact dealers to complete the sale.
This news goes much further and is the latest example of major changes in the car retail channel. While many states still have laws that make it hard to escape franchised car dealers, companies like Tesla, Lucid and Rivian have developed workarounds. And EV buyers are especially open to new ways of car shopping.
Bigger automotive brands have been paying close attention, too, with Jim Farley, Ford’s CEO, being particularly outspoken. For more than a year, he’s been pushing for fully online transactions for the company’s EV division, saying Ford needs to be able to knock $2,000 out of sales and distribution costs if it wants to compete with companies like Tesla.
Amazon is already deeply invested in disrupting the auto business. It is Rivian’s largest shareholder, with a 17% stake. Last week, Rivian said it was ending its exclusive relationship with Amazon and will now sell its electric delivery vans to other companies.
"Hyundai is a very innovative company that shares Amazon's passion for trying to make customers' lives better and easier every day," said Andy Jassy, Amazon’s chief executive officer, in the announcement of the new deal. "Our broad, strategic partnership should do just that, from changing the ease with which customers can buy vehicles online to making it simple to use Alexa in Hyundai vehicles for entertainment, shopping, smart home adjustments, and calendar checks.”
"Partnering with one of the world's most customer-centric organizations unlocks incredible opportunities as we continue to expand our portfolio, grow our sales network, transition to electrification and realize the future of smart mobility," says Jaehoon (Jay) Chang, president and CEO of Hyundai, in the release.
Following Hyundai’s announcement, shares in both Carvana and CarMax, which sell used cars online, fell.