The total addressable market for new and used vehicle sales in the United States is estimated to be between $2.5 trillion and $3 trillion National Automobile Dealers Association.
There are also e-commerce giants Amazon is trying to do what industry insiders say no one has yet been able to do: bring a seamless online shopping experience to a complex and highly regulated industry.
Last month, the company officially began a pilot program that allows small modern Dealers only sell vehicles to employees through the Amazon platform. The pilot program joins others Amazon has previously launched in travel, groceries and healthcare.
Amazon President Jeff Dyke said cars are one of the most in-demand products among Amazon’s approximately 150 million Prime customers. sonic carone of the largest publicly traded dealer groups in the country.
Chris Sutton, vice president of automotive retail at JD Power, said that about 25% to 30% of car buyers hope to complete part or all of the car purchase process online. When you factor in the small but growing segment of EV buyers, that number jumps to 40%.
A small group of car manufacturers, mainly electric vehicle companies, e.g. Tesla and Rivian, bypassing dealers entirely and selling new cars through their websites.company likes Karavana Make used car sales completely online. But online purchases still account for a small portion of total sales.
Most new-car markets are made up of franchised dealers protected by strict state vehicle sales laws and cannot mimic the click-and-buy purchasing process that consumers are increasingly able to do elsewhere.
So far, Amazon’s plans are small, but dealers are watching. Some doubt Amazon can overcome the challenges that have hindered other companies.
Dyck said concerns that the plan would threaten the future of franchisees were “ridiculous” but understandable.
“I think Amazon brought a level of sophistication, a level of technology, a level of people strength to this project that was unlike anything I’ve ever seen,” he said.
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