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Amazon partners with Hyundai for online car sales, shaking up auto industry

Welcome back to the latest episode of The Future of Automotive, with Steve Greenfield, Founder and CEO of Automotive Ventures, where we put recent automotive and mobility news into the context of the broader themes impacting the industry.

Big news this past week as Amazon announced they are getting into the car retail game.

To be clear, they will be listing dealership vehicles online. However, the potential impact of this announcement should not be minimized. I don’t think this initiative should be dismissed as Amazon providing dealerships with a new source of third-party leads.

At the LA Auto Show last week, Hyundai announced that they will be the first automaker to partner with Amazon and begin selling vehicles in January, enabling consumers to complete the full car-shopping and buying experience online.

The program will begin with 18 Hyundai dealers, with a broader rollout to follow in the second half of the year. The automaker, likely concerned with how dealers might interpret the news, made a point to emphasize that its dealers will continue to play a role in online sales.

The plan is to have payment and financing options available to the consumer during checkout. Based on availability, the new vehicle will be delivered to the buyer or available for pickup at their local dealership.

It wasn’t clear if the dealer had the option to offer all of their indirect financing options to the consumer, nor whose F&I products were likely to be presented. There was also no news on how a consumer could get a trade-in price for their vehicle. 

So, it appears that Amazon may have a lot of kinks to work out of the system before this experience gets more mainstream adoption by additional automakers, beyond Hyundai.

This initiative by Amazon is a long time coming.

If you look at the top retail categories in the U.S., Amazon is a dominant player in all other categories outside of automotive retail.

Amazon generates an estimated $8.3 billion reselling automotive parts and accessories, plus $1.9 billion in OEM replacement parts sales for a combined total of $10.3 billion.

Amazon enters the automotive retailing sector with Hyundai, shaking up the market. Explore the impact on dealerships and industry dynamics.

But, automotive retail is a category that is just far too large for Amazon to ignore.

They’ve sat on the sidelines as direct retailers like Tesla have proven there is a segment of consumers who will buy new vehicles sight-unseen and have them delivered.

And Carvana and CarMax have proven the same for a segment of used vehicle shoppers. 

So, it’s not surprising that Amazon is throwing significant resources at how best to get into the auto retail category. 

How did the market react to this news? Car dealerships like CarMax, AutoNation, and Carvana all saw their shares drop as much as 8% last week as the market had to digest the news real time. These players may see increased competition depending on how this news from Amazon plays out.

Amazon’s announcement isn’t the first time it has shaken up an industry with a simple press release.

The company sent shockwaves in the auto parts retail industry after it announced its plans to start selling auto parts on its website in early 2017. The company’s foray into health insurance sent insurance stocks plunging in January 2018. Amazon’s intention to launch physical pharmacies sent shares of CVS and Walgreens reeling in May 2021.

So, what are the implications to the industry, and what should we be watching out for?

It’s not lost on me that by 2024, the number of Amazon Prime members in the United States is projected to reach more than 180 million users, up from 168.5 million in 2022. To put this stat into perspective, there are only 124 million households in the U.S.

Another stat that resonates with me: 51% of consumers start their product searches on Amazon. 

We’ve conditioned the majority of consumers in America to expect the benefit from Amazon’s halo of trust, comprehensive selection, and very liberal return policies. So, it’s not a stretch for me to believe that there will be a healthy segment of consumers who will turn to Amazon for their car shopping and buying needs in the future.

What are the implications on other third-party websites and even dealership websites? I think this is something that we should watch closely, given Amazon’s dominance across almost every other shopping vertical.

Dealers should be keeping a keen eye on how Amazon will look to price this offering, and whose finance and protection products are presented to the consumer in the experience.

Remember that, for most businesses, Amazon charges sellers 15% of the product’s selling price on each product sold, regardless of the eCommerce fulfillment method. Outside of the seller fee, Amazon charges two main types of fees: fulfillment fees and inventory storage fees.  

Six years ago, Amazon took 35% of each sale, but it has increased its cut yearly. Now, for over 2 million third-party vendors, Amazon has raised its cut for selling on its platform. From 35% six years ago, Amazon now takes 50% on average. 

So, for all of these reasons, we shouldn’t dismiss this news, and it will be one we want to keep our eye on.

Companies to Watch


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If you want to learn more about Citian, you can check out their website at

Future of Mobility

If you’re an AutoTech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our new DealerFund.

If you’re interested in joining our Investment Club to make direct investments into AutoTech and Mobility startups, please join. There is no obligation to start seeing our deal flow, and we continue to have attractive investment deals available to our members.

Don’t forget to check out my book, “The Future of Automotive Retail,” which is available on And keep an eye out for my new book, “The Future of Mobility”, which will be out at the end of the year.

Thanks (as always) for your ongoing support, and we look forward to working closely together with you to create the future of this industry.

Thank you for tuning into CBT News for this week’s Future of Automotive segment, and we’ll see you next week!

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Steve Greenfield
Steve Greenfield
Steve is the Founder and CEO of Automotive Ventures, an automotive technology advisory firm that helps entrepreneurs raise money and maximize the value of their companies. They also assist PE firms to conduct due diligence on automotive technology acquisitions, advise technology CEOs on strategy, and help represent sellers at the time of sale.

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