E-commerce behemoth Amazon.com’s (AMZN) Amazon Autos unit has started offering automobiles to customers online. The service began in 48 cities across the U.S. on December 10. The first auto brand to be sold on Amazon Autos is from Korean automaker Hyundai Motor Company (HYMLF), with only new vehicles being offered for now. Although Amazon Autos has said that it will enter partnerships with other automakers in 2025.
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Amazon directly competes with Costco Wholesale (COST) and Walmart’s (WMT) car-buying programs that offer both new and resale autos.
Amazon’s Pathway to Selling Autos
Customers can visit Amazon Autos’ online portal to search and customize the model and features of the Hyundai auto they want to purchase and also select a nearby Hyundai dealer for the auto pickup. They can almost instantly get a valuation of their current auto in case they want to trade one with a new purchase. Customers also get the option of paying the full amount of the auto or seeking financing choices. Amazon had initially announced its intent and partnership to sell Hyundai cars online in November last year.
With Amazon Autos, Amazon seeks to personalize and simplify the auto buying experience, backed by years of expertise in e-retailing. On the one hand, Amazon gets exposure to the lucrative auto sector, while on the other, the system excludes the hassle of inventory and supply management. Amazon’s foray into the online car sales could prompt other tech companies to follow suit.
Meanwhile, there are already established players in the auto e-commerce market that buy and sell both new and used autos. With only one partnership to boast as of now, it remains to be seen if Amazon can really hit the jackpot this time with newer regions and partnerships.
Is AMZN Stock a Buy or Sell?
Analysts are highly bullish about Amazon stock’s trajectory. On TipRanks, AMZN stock commands a Strong Buy consensus rating based on 45 Buys and one Hold rating. Also, the average Amazon.com price target of $240.24 implies 6.8% upside potential from current levels. Year-to-date, AMZN stock has gained 48.1%.
