In a groundbreaking move, Amazon and Hyundai’s joint announcement at the LA Auto Show promised a seamless car-buying experience on the e-commerce giant’s platform. However, the current reality of their pilot program falls short of the envisioned hassle-free, online transaction.
The pilot program, as outlined by CNBC, is currently limited to a select number of states and exclusively available to Amazon employees. Despite the initial excitement, the process still demands buyers to conclude paperwork in-person at the dealership, a far cry from the anticipated all-digital transaction.
Hyundai had initially introduced a “digital showroom” on Amazon in 2018, eventually declaring at the 2023 LA Auto Show that it would be the first automaker to sell cars through the digital retailer. However, skepticism arises as industry experts, such as Jim Appleton, President of the New Jersey Coalition of Automotive Retailers, question whether this initiative is anything more than a lead-generator program akin to Autotrader or Cars.com.
One of the major hurdles Amazon faces is its lack of a new-car dealership license. State franchise laws typically mandate new-car transactions to be handled by licensed dealers, and Amazon’s collaboration with Hyundai dealers is pivotal for both providing the cars and legally executing the transaction. This dependence on traditional dealers raises doubts about Amazon’s potential to disrupt the current dealership model.
Complicating matters further are state requirements for “wet signatures” on new-car transactions, necessitating physical visits to the dealership’s finance office. This traditional process, characterized by high-pressure sales tactics and hidden fees, contradicts Amazon’s goal of offering fixed-price transactions entirely online.
While Amazon aspires to streamline the car-buying experience with fixed-price transactions and designated pick-up areas at participating dealerships, the challenges posed by industry practices and state regulations persist. Dealers, accustomed to employing negotiation tactics and add-ons for profit, may resist the shift towards a more consumer-friendly approach.
Despite these obstacles, it’s premature to dismiss Amazon’s ambitions entirely. Pilot programs often serve as learning experiences, and Amazon has a track record of making significant adjustments between initial trials and finalized offerings. The company’s ultimate goal is to provide consumers with fixed-price transactions conducted entirely online, aligning with the preferences for speed and transparency expressed by car buyers.
For now, if consumers seek fixed pricing, freedom from high-pressure sales, and a streamlined online experience, alternatives like Tesla and Rivian, where online sales are integrated into the business model, remain viable options. The road to revolutionizing the car-buying process may be fraught with challenges, but Amazon’s determination to reshape the industry suggests that future attempts may bring about meaningful change.
Source: insideevs
