Amazon will allow auto dealers to sell cars on its site, starting with Hyundai

KEY POINTS

• Amazon next year will allow auto dealers to sell cars through its site, starting with Hyundai.
• The company has slowly muscled its way into the car buying business over the years by launching a digital showroom for shoppers to research and compare vehicles.
• With the move, shoppers will be able to buy cars on Amazon, but the dealer is the end seller.

Amazon next year will allow auto dealers to sell cars through its site, starting with South Korean automaker Hyundai, the company said Thursday.

The company has slowly muscled its way into the car-buying business over the years, launching digital showrooms on its site for shoppers to research and compare vehicles, but not purchase them directly through Amazon. Consumers can also buy car products, such as replacement parts, through its site.

Beginning in 2024, Amazon will let shoppers purchase a new car online, then pick it up or have it delivered by their local dealership. Consumers will be able to search for available vehicles in their area, make a selection, then check out on Amazon using their preferred payment and financing method. The company said the new feature will "create another way for dealers to build awareness of their selection and offer convenience to their customers."

Amazon CEO Andy Jassy said the partnership with Hyundai will change "the ease with which customers can buy vehicles online." As part of the deal, Hyundai will also include Amazon's Alexa voice assistant in its cars starting in 2025.

Shares of used car dealers such as Carmax and Carvana as well as the country's largest publicly traded new car dealers Lithia Motors and AutoNation fell following the announcement. Shares of those companies closed down between 5% and 6% on Thursday.

With the move, shoppers will be able to buy cars on Amazon, but the dealer is still the end seller. Traditional automakers such as Hyundai have complex relationships with dealers that are backed, in many states, by laws that make it difficult or illegal to bypass franchised dealers and sell new vehicles directly to consumers.

Tesla and other electric vehicle startups such as Rivian have developed workarounds in many states to sell vehicles directly online to consumers. They include originating the sale in states that don't outlaw the practice, or taking legal action to fight such laws, as they have done in Michigan.

There are less stringent laws regarding used vehicle sales, which makes it easier for companies such as Carvana and others to sell preowned cars and trucks online directly to consumers.

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