Pandemic lockdowns got millions of American motorists to rethink the car buying process as they began shopping from home much like they do groceries and electronic gadgetry. So, it should be no surprise that Hyundai announced it will start selling its products through Amazon. But while it will be the online retail giant’s first automotive partner, it won’t be the last, reports Headlight.News.
“Alexa, order me the new 2024 Hyundai Santa Fe.”
Starting early next year, you won’t have to go to a showroom to buy a new vehicle from the South Korean carmaker. You’ll be able to do it online through retail mega-store Amazon, the new partners announced at the LA Auto Show.
Getting “first-mover advantage” could deliver a substantial boost to Hyundai sales, the automaker’s U.S. CEO told Headlight.News during an exclusive interview. But don’t expect Hyundai to have things all to itself, an Amazon official cautioned, as other manufacturers are expected to follow.
Taking things to the next level
“This is an opportunity for us to elevate the consumer experience,” Hyundai Motor America CEO Randy Parker said.
It also could deliver a significant boost to Hyundai’s business, Parker acknowledged, since Amazon Prime has 150 million members and its online store gets about 250 million monthly visitors.
“That’s a lot of eyeballs, a lot of customers,” said Parker.
An expanding relationship
The automaker first teamed up with Amazon five years ago, allowing potential buyers to check out its products online. But those ready to purchase models like the Santa Fe, Sonata or Ioniq 5 have still had to connect with a dealer.
Starting next year, consumers in a handful of markets will be able to handle the entire process through the retailer’s Amazon Prime service, including lining up a loan, if need be, through Hyundai’s captive finance subsidiary. They even can get the vehicle delivered to home or office.
“This is a transformational journey we’re in together,” said Hyundai Motor Co. Vice Chairman Jose Munoz.
Barring some unforeseen setback, the program will roll out across the U.S. during the second half of 2024, according to Munoz, who revealed the program during an auto show news conference.
Amazon will let shoppers explore available inventory at local dealers to get the precise model they want,. rather than having to settle for what might be in stock at a single lot. And they’ll be able to compare dealers, as well
But “when a Hyundai vehicle is sold on Amazon it’s the dealer who will be the seller of record,” explained Mike Sullivan, owner of Hyundai Santa Monica, and one of the lead participants in the upcoming pilot program.
Hyundai dealers have to “volunteer” to participate in the program, added Munoz, but the initial response has been “100%” favorable. For the first half of 2024, however, just 18 retailers will be involved.
What’s in it for Amazon
Neither Hyundai nor Amazon would discuss the economics of the new program, Marty Mallick, the online retailer’s Vice President of Corporate Partnerships, telling Headlight.News that Amazon would get “indirect” payments.
That indicates there won’t be a direct commission for vehicle sales in line with what dealers get. Several insiders we spoke to suggesting the model is closer to how things currently work elsewhere with online car buying.
There are numerous sites that refer potential customers to a dealer. In turn, they get a set fee for each qualified buyer.
More automakers to come
Due to the ongoing relationship it has with Hyundai, Mallick said that Amazon will focus on launching the program with just the Korean manufacturer. It has had contact with other manufacturers but there is no timeline in place for bringing additional brands onboard, he stressed.
“We expect more will follow over time.”