The Impact of Hyundai’s Partnership with Amazon on Car Dealers

Introduction

Hyundai made headlines three months ago when it announced its plan to sell new vehicles on Amazon by the end of 2024. This move would allow consumers to complete the entire car-buying process on the e-commerce platform.

How It Works

While Amazon doesn’t directly sell cars, it serves as the platform for finalizing transactions. Hyundai dealers must register for the program, list their inventory, and set prices. After a sale is made on Amazon, local dealerships handle delivery or pickup.

Challenges Faced by Dealers

Despite the convenience for consumers, U.S. dealers have expressed concerns about Hyundai’s partnership with Amazon. A survey conducted by Auto News revealed that many dealers fear this collaboration could lead to a shift towards a direct-to-consumer sales model, similar to Tesla’s approach.

Dealer Dissatisfaction

Over half of the 208 dealers surveyed viewed the Hyundai-Amazon partnership as a threat to traditional dealerships. They worry about the impact on customer service, trade-ins, and other revenue streams like finance and insurance.

Testing the Partnership

The partnership between Amazon and Hyundai is currently being tested in select markets, with the first sale made to an Amazon employee in Seattle. Dealerships are concerned that the lack of personal interaction during the sales process could affect customer loyalty.

Looking Ahead

While the partnership is still in its early stages, dealers are skeptical about its long-term success. They believe that the unique nature of car purchases requires a more personalized approach that may be lacking in an online model like Amazon’s.

Conclusion

As Hyundai and Amazon continue to explore this partnership, it remains to be seen how dealers will adapt to this new sales model. The industry is at a crossroads, with traditional dealerships facing challenges from evolving consumer preferences and digital platforms.