Amazon in detailed talks with car manufacturers to sell vehicles online

Time 12:55 pm, October 25, 2019

AMAZON is in advanced talks with UK car manufacturers to sell vehicles directly to the public via its website.

Manufacturers have confirmed to Car Dealer Magazine that discussions with the tech titan are ongoing about offering cars for sale on its platform.

It is believed Amazon wants to bypass dealers and fulfil the sales process entirely online – delivering cars straight to the doors of consumers.

Renault UK boss Vincent Tourette told Car Dealer Magazine his firm had been ‘in discussions’ with Amazon, but that it had been ruled out because he ‘did not believe in bypassing dealers’.

PSA Group – which owns Peugeot, Citroen, DS and Vauxhall – also confirmed that it has had talks with Amazon.

Vincent Tourette

Tourette said: ‘The benefits they [Amazon] would have is that they would be offering all brands – they would be multi-franchise.

‘Amazon will try to go direct with manufacturers, they want to sell these cars directly. That is what has been discussed.’

He added that he believed Google was also investigating the option of selling cars directly to consumers, hinting that talks had taken place with the search giant as well.

‘I think they are both in project mode at the moment and I am not sure how far down the line they are with it. I think logistics-wise you need strong logistics to sell cars so Amazon would probably be better placed right now.

‘I want to support my dealers, so it is not something I am considering.’

Amazon told Car Dealer Magazine that it would ‘not comment on rumour or speculation’.

It will come as no surprise to the motor industry that these tech giants are looking seriously at selling cars in the UK.

A number of manufacturers are already dabbling with online sales, while car dealers have some clever solutions to retail cars directly to consumers.

Tourette admitted that Dacia’s online sales platform, launched around a year ago as a trial, had only sold 90 cars. Other manufacturers with online solutions are experiencing similar disappointing sales figures.

Giles Smith, chief executive officer of GForces – a web firm that builds an online sales solution, said: ‘You wouldn’t bet against Amazon – it’s an unstoppable force. But we think customers still want a relationship with a dealer. Even if it means completing much of the transaction online, they’ll want to pick it up from a dealership still.

‘The question will come over who owns the customer and their data – will it be Amazon, the manufacturer or the dealer? We all know that once you’ve bought from Amazon their marketing kicks in and that’s where their power lies.

‘Our online sales platform has facilitated the sale of 1,000 cars for the 18 dealers currently using it and we have more going live all the time. Every day the volumes are going up. We believe dealers are massively important and have a strong part to play in the e-commerce revolution.’

The major advantage online sales portals such as Amazon or Google would have is they could offer all brands in one place, allowing customers to easily compare cars and deals.

In the States, Amazon already offers customers the ability to search and compare vehicles on its site, but not currently the option to buy. Customers can research on the site and are then connected to the manufacturers’ websites for more information.

James Hind, CEO of Carwow, said he had heard Amazon wasn’t keen on the car market and that tests the online retailer had carried out were ‘low impact’.

‘What Amazon are good at is logistics and you can’t get a car in the back of a van or in a warehouse – and they don’t like to rely on others,’ he said.

’They are, however, very good at segmenting their customers right down, so if people want to target 55-year-old men living in Surrey, they can do, and that data could be used powerfully.

‘Car manufacturers have invested in dealer networks, and to then bypass them on a site like Amazon and allow them to undercut their network would be very difficult.’

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James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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