Amazon.com (AMZN) has recently made a groundbreaking announcement that it will be entering the online car sales industry in 2024. This marks a significant move for the e-commerce giant, as it ventures into a completely new sector. As a result, stocks of Carvana (CVNA), CarMax, and other auto dealerships experienced a decline.
Amazon’s foray into digital vehicle sales will primarily focus on Hyundai cars that are sold by dealerships. This partnership will see Hyundai integrating Amazon’s renowned Alexa voice assistant into its cars starting in 2025. Additionally, Hyundai will utilize Amazon Web Services (AWS) for cloud services.
While Amazon’s stock experienced a slight decrease of 0.3% following the announcement, Carvana stock, CarMax, and AutoNation, who are already established in the auto industry, saw a significant decline of 5%-6%.
It is worth noting that Tesla (TSLA) has already pioneered online car sales through its website. However, the news of Amazon entering the car sales industry has been long anticipated, ever since rumors circulated in 2017 and caused a notable sell-off in auto parts stocks.
The move by Amazon to tap into the car sales market reflects the company’s ongoing strategy to expand its dominance in a range of industries. With its extensive reach and customer base, Amazon has the potential to disrupt and reshape the car sales landscape. As online shopping continues to grow in popularity, it seems fitting that the e-commerce giant is now setting its sights on the automotive sector.
The news of Amazon’s entry into the online car sales market has certainly made waves in the industry, with investors and competitors alike closely monitoring the developments. As the launch year approaches, it will be interesting to see how Amazon’s presence impacts the traditional car sales model and if other e-commerce giants follow suit.