With Hyundai Deal, Alexa Helps Amazon Link Commerce to Connected Cars

With the recent news that Amazon is partnering with Hyundai, the conventional wisdom might be to say: Amazon sells pretty much everything else across its platform, and as part of its evolving ecosystem. So why not cars?

As announced earlier this month, beginning the second half of 2024, Amazon will start selling Hyundai vehicles on its site. In the release detailing the joint efforts, it’s noted that “auto dealers, for the first time will be able to sell vehicles in Amazon’s U.S. store, and Hyundai will be the first brand available for customers to purchase.” The implication, of course, is that other carmakers will join the roster.

And by other carmakers signing on, as time goes on, it’s a fairly safe bet that Amazon thus positions itself to give car-centric platforms, such as TrueCar, CarMax and others, some competition for customer and dealer loyalty. For the dealers, especially, there’s the opportunity expand their own reach, beyond their own online efforts, enjoying the fruits of omnichannel options to get their vehicles to customers.

One key consideration is just how the cars might get delivered to the proverbial doorstep.

If Amazon has a hand in that last mile (pun intended), it’s not detailed in the release. But, as has been widely reported in recent years, fulfillment has been an increasing part of the Amazon identity, in terms of the added services it provides to merchants and enterprises.

It’s important to note, too, that the pact also includes “chosen payment and financing options.”

Buy with Prime brings to mind a scenario where one orders the Elantra of their dreams, checks out with Amazon Pay, and the car comes in a day or two, alongside a separate purchase for something wholly unrelated but ordered through Amazon — books, perhaps, or clothing for the trip away for the weekend meant to be the Elantra’s inaugural voyage.

Market Potential — and Connected Potential

There’s evidence that the platform approach to car-buying is a market that is 1) fragmented, 2) massive and 3) ripe for eyeballs and click-throughs.  Carvana noted in its presentation materials online that the auto industry racks up about $1.2 trillion in annual sales, and that the largest dealer has only 2.3% market share. About 86% of car purchases involve at least some online research and exploration, and more than 60% of consumers would consider buying their vehicles online.

Amazon/Hyundai also heralds the use of Alexa across a broad range of use cases. The release notes that Alexa will be used in vehicles “for entertainment, shopping, smart home adjustments, and calendar checks.” The day might be coming, then, when browsing and buying behind the wheel leverages the spoken word to buy goods — the morning coffee, gas, in-transit entertainment for the kids, and maybe even the shirt you’d want ready for you in an hour or two — while using Amazon Pay to close the transaction. Payments, after all, are becoming a key consideration in new iterations of in-vehicle functionality, as they’re part of announcements from the likes of Mercedes-Benz, working with Visa, and J.P. Morgan, working with Volkswagen.

Amazon and Hyundai said this past week that the Alexa functions that will debut in 2025 include “control[ling] their smart home from the road, such as asking to warm up the house on their way home, double-checking doors are locked, and managing smart lighting and Alexa routines.”  PYMNTS Intelligence data already has found that 58% of consumers would use voice because it is easier and more convenient than doing tasks manually and 54% would also use it because it is faster than typing or using a touchscreen.