New Hyundai vehicles on a lot in Canton, Ga. Amazon Autos allows U.S. customers in select regions to buy new Hyundai vehicles.Mike Stewart/The Associated Press
Shoppers might soon be able to buy their next set of wheels from the same place they shop for toasters, toys and soap refills as “the everything store” expands its auto marketplace – a move that could benefit consumers and threaten the existing auto marketplace.
Amazon Autos, which launched last December allowing U.S. customers in select regions to purchase new Hyundai HYMTF vehicles, announced Monday it is expanding to include a variety of used and certified preowned vehicles, starting in Los Angeles and then rolling out across the United States within months.
Amazon.com Inc. AMZN-Q told The Globe and Mail the company plans to roll out the program internationally in the future, but it declined to provide a timeline.
Should Amazon Autos expand into the Canadian market, the move could be a boon for consumers, at least in the short term, by encouraging more competitive pricing and increased transparency while making it harder to sell at exorbitant prices, said Daniel Ross, senior manager of industry insights and residual value strategy at Canadian Black Book.
But it would also have disruptive effects in the online vehicle marketplace, benefiting sellers that are willing to work with the retail giant while posing a threat to competing online auto marketplace platforms as well as resellers, and potentially wielding significant influence over consumer behaviour.
“As with any other product Amazon would sell, you would have the capacity [for] just the right size and the volume to probably add a lot of risk to those marketplaces that exist today, whether that’s Kijiji in the U.S. or in Canada or AutoTrader in Canada,” said Mr. Ross. “I think it really makes for a very competitive environment.”
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AutoTrader and Kijiji did not respond to a request for comment by the deadline.
Dan Park, chief executive officer of Clutch Technologies Inc., a major Canadian online car reseller, said he sees Amazon’s entry into the space as validation of the shift in consumer expectations. “Amazon’s move into car retail reinforces what we’ve believed at Clutch since day one: The future of car buying is online,” he said.
But he noted a key difference between Clutch and Amazon Autos: While the tech giant still relies on traditional dealerships, Clutch isn’t a marketplace. “We own every car in our inventory,” Mr. Park said.
Participating dealerships list new, used and certified preowned vehicles on the Amazon Autos storefront.
Customers have the option to filter results while seeing full itemized costs, warranties and vehicle history reports, according to an Aug. 4 news release. The information is standardized and there’s no negotiation – what you see is what you pay.
Only Hyundai dealers are currently onboarded to the platform, but those dealers can now list used vehicles from any manufacturer – not just Hyundai Motor Co. – and Amazon plans to expand to non-Hyundai dealers soon.
Buyers select and purchase their vehicle through Amazon, then pick it up from a dealership. Customers can test drive a car or return it within three days or 300 miles, according to the release.
Amazon Autos is currently available in more than 130 U.S. cities for new vehicle sales, while used and certified preowned vehicles are available to customers in Los Angeles. The company plans to expand to cities from coast to coast by the end of the year.
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In the long term, the consequences for other individual dealerships depend on their openness to digital adoption and desire to have their vehicles listed on Amazon, Mr. Ross said. “Cost competitiveness might decrease some of their profit margin, but if they want to develop a more volume-oriented business, this will lend to that and benefit them.”
For some dealers, Amazon could become another avenue for digital retailing.
“It opens the market that much more … it gives them a much larger pool,” said Mr. Ross. “But it also adds the opportunity for that competitiveness to drop down certain vehicle prices that might be a little bit exorbitant.”
While Amazon’s service could offer a convenient experience for car shoppers, Mr. Ross warned that the responsibility to ensure that nothing goes wrong may shift more to the consumer rather than dealers and resellers.
“There’s a process that’s going to be attached to a much greater volume of vehicles,” he said. “You might have more of an obligation to make sure you’ve read everything.”
If Amazon continues to become a larger player in the auto space, its algorithms could also influence consumer behaviour, such as whether they drive a hybrid or electric vehicle.
“If Amazon says, ‘We are proponents for zero-emission vehicles,’ or ‘We love smaller cars rather than bigger cars,’ there could be opportunities to change the consumer buying habit just by what’s available on an Amazon marketplace, and their pricing algorithms,” said Mr. Ross.