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Amazon would dearly love to get into selling new cars. It also is one of the largest web services companies in the world. In a joint press release at the Los Angeles auto show on November 18, 2023, Hyundai and Amazon announced a new partnership that will offer Hyundai automobiles — both conventional and electric — online through Amazon starting early next year. The companies expect their partnership will make it more convenient for customers to find and buy the vehicle of their choice online at Amazon.com and pick it up from their local dealer.
The strategic collaboration includes Amazon launching online sales of Hyundai vehicles in the U.S. in 2024, Hyundai naming AWS as its preferred cloud provider to help facilitate digital transformation, and the Alexa Built-in experience which will be coming to next generation Hyundai vehicles in the near future.
“Hyundai is a very innovative company that shares Amazon’s passion for trying to make customers’ lives better and easier every day,” said Amazon CEO Andy Jassy. “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; to enabling Hyundai to transform their customer experiences and business operations by moving to AWS. We look forward to inventing together for many years.”
“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,” said President and CEO of Hyundai Motor Company Jaehoon (Jay) Chang.
“Amazon is the ideal partner to help realize our vision of progress for humanity, including improving how people and goods move more efficiently and sustainably. Hyundai is the first automotive company available for full end-to-end transactions in Amazon’s U.S. store and this is another example of how we continue to push for ways to elevate the customer journey together with our outstanding retail partners.”
Amazon and Hyundai executives told Motor Trend at the Los Angeles auto show that the process should be smooth for customers and will eliminate the stress they often face at dealerships. Once a particular car has been selected, all the customer has to do is show up at the participating Hyundai dealership to pick up their new vehicle. It’s the first time for Amazon to sell cars on its website — a business it wants to expand in the future.
“How people shop and buy products it’s always evolving,” Marty Mallick, Amazon vice president of worldwide corporate business development said. “We have a new generation of users that are growing up with a smartphone on their hand. And we saw a demand from our customers that they were seeking from Amazon.”
Customers will simply log onto Amazon.com and type their location. Amazon will then show the inventory available in their area. Customers will select the model and options they want, then go through the financing process. After adding the selected car to the cart and checking out, they will be able to make a down payment and sign all the paperwork online — eliminating the need to go to the dealer. There will not be any haggling, threats to walk out to get a better deal, or price markups. “Here’s the price. It shows you what rebates you qualify for, incentives that are available, and then you decide if you buy it cash, or go through financing,” Mallick added.
Dealerships have to sign up for the program, and while the nationwide program can be beneficial to many dealers, not all of them will be interested or will qualify. “Amazon is not going to be right for every dealer, and not every dealer is going to be right for Amazon. We’re really looking for high quality dealers who are forward thinking and as customer obsessed as we are,” Fan Jin, Amazon’s director of vehicle sales said. He added that Hyundai Capital will be available for financing but over time more financing options will be offered.
Booking a test drive will not be available on Amazon. Customers will need to visit a dealer to get a feel for the car in person. “We’re looking at the dealership as the hub of the physical experience,” Mallick said. However, customers will be able to see Hyundai vehicles in 360 degrees inside and outside on Amazon like they do on Hyundai’s site today — a so-called “enhanced showroom.”
Wait times to pick up a vehicle shouldn’t be long, Jin said. Because Amazon will only display the current inventory that dealers have, the car should be available within a couple of days from the date of purchase. “That’s the type of experience we want to offer for our customers — somewhere they can take delivery immediately.”
There will not be any return policies for now, but Mallick told Motor Trend that as Amazon and Hyundai go through the testing phases next year and have more interaction with customers, they will decide whether that could be a viable option.
Alexa Coming to Hyundai Vehicles
The partnership between both companies will also bring Amazon Alexa to Hyundai vehicles in 2025. Owners will be able to use the same kind of Alexa voice commands they use at home. Mallick said that things like opening the garage door or turning on the lights at home are tasks that drivers will be able to do from their car. “You’re bringing the smart home experience to your vehicle in a very intelligent way,” he added.
Not everyone is thrilled by the prospect of Amazon monitoring everywhere they go and what they say while inside their vehicles. Presumably there will be the ability to tell Alexa to turn itself off if desired.
AWS Preferred Cloud Provider For Hyundai
Hyundai also announced in Los Angeles it has chosen Amazon Web Services as its preferred cloud provider across all departments, making it easier for every team to get their data and optimize production. “We’re really focused on helping customers like Hyundai achieve their goals and innovations they want to bring to their customers,” said Wendy Bauer, Amazon’s vice president and general manager of automotive and manufacturing. From the car buying process to the experience inside the car, AWS will help Hyundai in a variety of ways to innovate while keeping all the data secured.
The Takeaway
It will be interesting to see how many dealers sign up for this new program. As a group, they tend to be quite skeptical of any changes that might reduce their market power — or their profits. A number of GM and Ford dealers have pushed back against proposals they feel might do just that.
This isn’t quite a direct threat to the franchise dealer system but it is a departure from business as usual and that may be enough to convince many dealers to shy away from this opportunity — until they see their colleagues selling more cars because of the link up with Amazon. Change is not always a detriment, despite how many people fear it. This could get interesting.
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