Amazon has announced plans to start selling cars on its website, marking a major new product category for the online retail giant that made its start selling books.
The e-commerce firm said on Thursday that it will launch vehicle sales in the US in the second half of 2024, allowing local car dealers to sell directly to customers on its site.
In a joint announcement with South Korean car manufacturer Hyundai, the two companies said Amazon will begin by offering Hyundai vehicles.
In turn, Hyundai will name Amazon’s cloud computing unit AWS as its preferred cloud provider and integrate its next-generation vehicles with Alexa, Amazon’s popular voice assistant.
The idea, according to Amazon, is to have customers purchase a new car online and pick it up – or have it delivered – from their local dealer.
Amazon did not say how many dealers would be participating in the program or if customers across the US would be able to make purchases.
An Amazon spokesperson said the company would release more details as it builds the program, which is expected to begin with Hyundai franchised dealers and launch during the later part of next year.
Currently, Amazon sells vehicle equipment online and offers a showroom for consumers who want to research different types of cars they may want to buy. But consumers can not directly purchase a vehicle on its platform.
The announcement shows Amazon’s ambitions to grow its footprint through dealers in an industry that has strong lobbying forces and heavy state regulations.
Nearly all states require manufacturers to sell their vehicles through dealerships to ensure the automakers don’t undercut their own network of franchised dealers.
Despite its vision, Amazon might face challenges convincing consumers who might not feel comfortable making such a large purchase on its platform.
In a statement, an Amazon spokesperson said customers are increasingly purchasing vehicles online and the company will provide a “range of solutions that add transparency” to the car buying process to help them make an informed decision.
The latest move comes as Amazon faces another class action lawsuit over refunds on returned products, with plaintiffs accusing the retailer of failing to issue refunds for returned products.
The lawsuit was filed in federal court in Amazon’s hometown of Seattle this week.
Additional reporting from agencies.
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