Amazon in advanced talks with car firms to sell cars online

[James Baggott 227]

Hi all,

I've just published this one on our website which I thought might interest the forum:

http://cardealermagazine.co.uk/publish/amazon-talks-car-manufacturers-sell-cars-online/180296

Love to hear your thoughts on it...

[MarkTVS 209]

Will free next day delivery be included with my amazon prime?

[Mojo121 229]

Can see it working on new cars. Would hurt the franchisee model and probably mean more px’s go to WBAC.

[metcars 397]

Will the car be delivered in a bag I can reuse to send it back if I don't like it?

[umesh 336]

Amazon, we all know the power of this monster and how we’ve all got to love it’s simplicity, quick click and it’s here.

As we all know cars aren’t quite the same, new cars will work but what I’m so confused by is why would manufacturers want to supply Amazon, they want dealers to build new and very, very expensive showrooms to give customers the ‘buying experience’ and in the next breath want to supply cars via a third party.

On the one hand they(manufacturers) want to push ‘home delivery’ and next about experience, an I missing something?

Then there are warranty issues, where does the customer take the car to? Forgot the local dealer, who’s only too pleased to supply a free courtesy loan car and look after them!!

lots of main dealers are struggling to cope with 20/30 bay workshops today, 2/3 week lead times, so how do they handle these sales.

Some of us are already selling cars using ‘click and buy/reserve’ directly off the website, guess some of the buyers will love this but majority still want to visit/touch feel /smell before saying yes!

Watching with interest.

[CCC 31]

Interesting one but I think this summed it up so far..

”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’.”

Amazon talk to everyone as they will sell anything they can. However it’s dancing with the devil and you need to consider the impact on your whole distribution network.

A mate told me last year that Amazon had approached them and was very exciting until I pointed out that he’d instantly lose all his loyal distributors who actually generated his present sales.

12 months on they are still talking but nothing has happened as the risk is too great.

Also, as a manufacturer I’d not want to have a partner of equal power who are better placed to dictate terms.

So I will also watch with interest..

[metcars 397]

But amazon are the future. Consumers dont want to drag themselves out in the cold and rain to be shmoozed by a salesperson, because they are all conmen? Showrooms exist online, whether its furniture, TV's or high end watches, and that includes cars new and used (ebay?). Consumers now research purchases online/youtube then order and if they dont like it they just send it back? 

Click and buy is the future, embrace it? But hopefully not in my lifetime!

[Mark101 536]

I’ve just ordered some sunshine from Amazon. Can’t wait for it to come, think it’s due in March.

[Blenheim Car Sales 111]

Delivered by drone i assume

[Mikey360 68]

Give it another 10-15 years and I think people will be on board with buying cars from amazon.

[metcars 397]

2 hours ago, Mikey360 said:

Give it another 10-15 years and I think people will be on board with buying cars from amazon.

Sooner than that I reckon. I think this idea will be floated a few times until it 'works'. But I think we are heading this way. Don't forget womencustomers don't enjoy dragging around used car dealerships as much as you might think?

[Tony F 38]

It has been done before by Tescos--it failed miserably and they then sold the business to Virgin I think, who also flopped. Although I must say, back then, the public would not have been as receptive to buying online as they might be today and going forwards.

Aprill 2011: BBC News

Tesco has become the first general retailer to start a used car buying website.The supermarket giant claims it can offer low prices by controlling costs.

It will show detailed pictures of vehicles for sale - including any scrapes and dents - as well as a history report and fuel usage details.

It will not, however, give people the chance to test-drive vehicles. Instead, a video of the car being tested will be available for would-be purchasers.

Tesco says all vehicles will undergo a strict vetting process, including a mechanical inspection by the RAC.

The cars will come with a one month RAC warranty and the price will not be open to negotiation.

Tesco says by supplying directly to customers, there is no middle man, no expensive showroom and no salespeople on commission.

The majority of cars for sale will come from fleet and lease hire companies, with one registered keeper and a detailed service history.

Steve Fowler, editor of What Car? magazine, said it was too early to tell if car buyers would be happy buying without physically seeing or driving the vehicle, but said it did appear to offer a realistic alternative to "standing on a forecourt, haggling".

[BHM 994]

4 hours ago, Mark101 said:

I’ve just ordered some sunshine from Amazon. Can’t wait for it to come, think it’s due in March.

 It’s the second week in June here.

2 hours ago, metcars said:

Don't forget womencustomers don't enjoy dragging around used car dealerships as much as you might think?

I must be female cos walking into these emporiums of bullshit & false smiles always made me feel uncomfortable. Their patter absolutely stinks & from what I overhear when collecting the occasional sytner purchase it’s sank to new depths of cringeworthyness.

If anyone’s going to achieve it Amazon will, not sure how main dealers will be recompensed for lost sales though. I guess warranty work & servicing will simply be with renamed ‘service centres’ with negligible courtesy of service ‘bells & whistles’.

[trade vet 702]

It will probably happen.Amazon can order and prepay for 1000s of stock without blinking.Off topic,Anyone following BBC 3 Breaking Fashion about selling crap fashion ( called fast fashion) with the help of social media influencers.Real eye opener about understanding the must have mentality of millenials .

[J.T 39]

2 hours ago, Tony F said:

It has been done before by Tescos--it failed miserably and they then sold the business to Virgin I think, who also flopped. Although I must say, back then, the public would not have been as receptive to buying online as they might be today and going forwards.

The Co-op had a go too if I recall, but fell flat on their faces. They do still sell cars for me though as I'm right next door to a Co-op, and the amount of people who were just popping in the Co-op to get some shopping and end up buying a car from me is great. Don't tell them that though or they'll want a commission from me!

[BHM 994]

I seem to recall a few years ago reading that when Peugeot started with internet sales they were surprised to find the main uptake wasn’t younger buyers on cheap cars it was older buyers buying top of the range motors.

[Rory RSC 596]

Amazon will 100% make this work with new cars. Its the right time for it. The technology is right for it and the market is ready.

The public have been accepting brand new cars via delivery for a long time with lease deals. Thats a big chunk of the market who will buy unseen. VR headset, VR test drive VR walkround its all much, much closer to becoming accepted than it was in 2011. A lot of right ideas but at the wrong time don't work. 

Used cars will be harder to implement but given the fact my tiny business is already taking deposits on click engage, payment by bank transfer and then delivering the car far and wide there is no reason Amazon won't be able to bring it on board. 

 

Good retailers offering strong service, back up and selling nicely well prepped cars have some real good opportunity for this sort of thing, but I do wonder if anyone thinks AT are bad how much worse Amazon will be.

[trade vet 702]

There will be a lot of RHD new stuff sitting around at the moment.How might the manufacturers react if they offer to take 500 of X every 3 months less 50% and pay now.?

[metcars 397]

12 minutes ago, trade vet said:

There will be a lot of RHD new stuff sitting around at the moment.How might the manufacturers react if they offer to take 500 of X every 3 months less 50% and pay now.?

I'm far from being an expert on these things but i seem to remember reading that a manufacturer could arrive at its wholesale price by 'cost x 2.5'. So even a 50% off would still give them a good margin? 

[awc1000 93]

4 hours ago, trade vet said:

There will be a lot of RHD new stuff sitting around at the moment.How might the manufacturers react if they offer to take 500 of X every 3 months less 50% and pay now.?

There isn't plenty of new RHD stuff sitting around anymore these days apart from maybe the odd manufacturer , and that's the problem amazon would have - delivery lead time, it would be no better than the franchise network which due to most customers choosing spec can be painfully long, in short you can't sell what you havn't got, cars are quite different to general goods which you can sell online and honour a sale by using the accepted 28 day rule for delivery.

It will be interesting to see if amazon have the appetite to buy a bulk order and if the manufacturer has the appetite to serve them in this manor, iv'e seen this before in the mid 90's when a certain hire car company ordered thousands of vauxhall cavaliers, many of which were sent straight to auction for a profit, at the time a disaster for the franchises and rv values.

One possible swerve by the manufacturers is that they could produce a poverty model unavailable through the franchise network and exclusive to amazon, a price lead type unit similar to the dacia brand.

Can't see it working for used cars, i wouldn't want to give amazon a share of the profit in a unit i have prepped, which is what i presume they will want, based on the fact they say they are going to be selling cars not hosting adverts.

 

[CCC 31]

On 10/26/2019 at 4:38 PM, trade vet said:

It will probably happen.Amazon can order and prepay for 1000s of stock without blinking.Off topic,Anyone following BBC 3 Breaking Fashion about selling crap fashion ( called fast fashion) with the help of social media influencers.Real eye opener about understanding the must have mentality of millenials .

Love it. Though it's about the measurement and metrics as much as anything else to me. The Influencers are just a way of creating a brand from scratch and getting low cost publicity.

No different to what's been said here too in terms of sales - if it's not working improve the photography, reconsider price point etc.