Amazon looks to expand into used vehicles following successful voyages into the new car sales market
Online shopping for cars isn’t a new concept, especially in a post-COVID world. But it could become even more mainstream if the largest online retailer in the world, Amazon, decides it’s time to add used auto sales to its portfolio. It may be more likely than you think, considering Amazon already peddles new Hyundai vehicles to shoppers in 68 markets, including some US cities.
Hyundai
Amazon considering used car sales, warranties, and more
“We’re adding more dealers, and we’re excited to add not just new inventory for those dealers but also used inventory,” said Fan Jin in talks with Automotive News. Jin is the director of Amazon Autos and revealed that the online superstore is “getting into used cars soon” following the Hyundai new car sales pilot program. And it isn’t limited to car sales; Amazon Autos is bringing the entire dealership experience online. “Our focus is really on dealers and how we serve the whole dealer—all that they want to sell in the way that they want to sell them,” Jin says. That includes things like service contracts and maintenance packages, which are huge profit generators for dealers that often make more than the physical car itself does.
The case for online car sales is stronger than ever; it only makes sense for Amazon to get in on the action
The car sales world changed dramatically in 2020, as COVID-19 made online sales mandatory as opposed to a convenient option. If Amazon is considering moving into used car sales, they clearly have gleaned data that indicates it’s worthwhile. Leveraging their already copious amounts of buyer info also allows more efficient and lucrative automotive advertising opportunities—a market apparently already worth as much as $30 billion, just in the United States. Combining all of that intel makes Amazon a great place to market cars, but there’s even more value in selling aftermarket products—including warranties and service contracts—that buyers are likely to sign up for.
But even teraflops of data and advertising power notwithstanding, online car purchases are already popular. Outfits like Autotrader, CarGurus, et. all make substantial amounts of money doing exactly what Amazon is looking into. What’s more, some analyses have concluded that the used car market will more than double in value by 2032 to a tremendous $885 billion. That kind of cash flow becomes impossible to ignore for a company always looking to grow, especially when Amazon seems poised to provide a more comprehensive shopping experience than the existing alternatives.
Final thoughts
There are still hurdles for Amazon as it tries to onboard dealers. For new vehicles, OEMs will be dipping their toes in carefully to ensure the brand is protected and presented well. Used vehicles will be less involved, but dealers will be closely watching their bottom line to ensure whatever traffic they’re getting from Amazon’s service recoups the cost of the service while paying dividends. No dealer is looking for “just another listing service”—and Amazon Autos’ scope seems to go a bit beyond that. Either way, Amazon’s expansion will likely demand the competition steps things up, because rivals that offer less won’t be around for long if they can’t offer similar services.
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