Amazon Autos is coming!

Today, David Kain is giving a presentation at the Automotive Dealer Seminar about Amazon Auto’s plans. The e-commerce giant, one of the largest companies in the world, is now seriously entering the online automotive retail space after years of running small pilot projects. Amazon is currently making these efforts in collaboration with Hyundai.

What does this mean and for whom?

The first businesses that might feel threatened are automotive portals like Autotrader.com, CarGurus.com, and Cars.com. These platforms, like those operating in the Netherlands, connect supply and demand. However, a major difference with the Netherlands is that American portals also focus on new car inventory at dealerships. This inventory is much larger than in our market, and new cars are commonly advertised both on the portals and on dealers’ own websites.

Dealerships—especially those that don’t sell Hyundai—could also feel threatened. Amazon has over 200 million automotive customer records stored in its accounts. These customers regularly purchase parts and accessories for their vehicles, allowing Amazon to know exactly who drives what. As a result, Amazon can directly approach Hyundai’s competitors with targeted offers on an Amazon platform that users visit daily and trust. Other brand owners with an Amazon account can also be easily targeted, making this initial partnership between Amazon and Hyundai a potential challenge for many dealers in the short term.

It took a while…

It has taken Amazon a long time to go beyond dipping a toe into online automotive retail. This delay was mainly due to two laws in the U.S. First, franchise laws work in favor of dealerships. These laws prohibit manufacturers from selling cars directly to end customers, meaning they must use a dealer framework. Tesla has successfully challenged this law in some states, but in many others, it has lost legal battles. The second law requires a sales contract to have a “wet signature.” A digitally signed agreement has no legal validity, leading to various complications.

As I wrote in my previous article, is it a risk for the entire automotive retail industry to show Amazon how this market operates? Once Amazon fully understands the ins and outs, they could scale up to a level we can hardly imagine. The cash-heavy company could, for example, choose to pay Stellantis’ market value and then launch an attack on the entire industry with over ten brands. Given the dynamic between Jeff Bezos and Elon Musk, I’d guess they aren’t exactly friends. And if one gets the chance to outmaneuver the other, he probably won’t hesitate…