The Future of Car Sales: Amazon Enters the Race

TLDRHyundai partners with Amazon to sell cars online, challenging the traditional dealership model. This move comes as more consumers turn to the internet to research and buy vehicles. While the pilot program is currently only open to Amazon employees, it is expected to expand to the general public in the future.

Key insights

🚗Auto dealerships are a $1.2 trillion business in the US, but many believe the model is broken.

💻More than 90% of consumers go online to research vehicles, and they are visiting fewer dealerships before making a purchase.

🛒Hyundai will be the first automaker to sell cars on Amazon, catering to the 150 million Prime customers who are interested in purchasing vehicles online.

🌐Legacy automakers like GM, Ford, and Honda are also exploring online sales to meet the growing demand for digital car buying.

📈The online car sales market has the potential to reach 5.5 million vehicles with an average transaction price of $48,000, making it a lucrative opportunity.

Q&A

Why are car dealerships considered to have a broken model?

—Many consumers find the car buying experience at dealerships undesirable and time-consuming.

What percentage of consumers research and buy cars online?

—More than 90% of consumers go online to research vehicles, and around 35% intend to buy their next car online.

How does the Hyundai-Amazon partnership benefit both companies?

—Hyundai gains access to Amazon's vast customer base, while Amazon expands its offerings and revenue streams by venturing into car sales.

Are other automakers also exploring online car sales?

—Yes, companies like GM, Ford, and Honda are developing online platforms and fixed-price models to cater to digital car buyers.

What is the potential market size for online car sales?

—Around 5.5 million vehicles with an average transaction price of $48,000 can be sold online, representing a market of approximately $262 billion.

Timestamped Summary

00:01Auto dealerships are a $1.2 trillion business in the US, but many believe the model is broken.

00:16More than 90% of consumers go online to research vehicles, and they are visiting fewer dealerships before making a purchase.

01:18Hyundai will be the first automaker to sell cars on Amazon, catering to the 150 million Prime customers who are interested in purchasing vehicles online.

04:00Legacy automakers like GM, Ford, and Honda are also exploring online sales to meet the growing demand for digital car buying.

12:46The online car sales market has the potential to reach 5.5 million vehicles with an average transaction price of $48,000, making it a lucrative opportunity.

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