The standout partnership between Amazon and Hyundai created quite a buzz at the top of the year. In today’s episode of Inside Automotive, we’re diving into how this partnership is progressing and what it means for both the future of car buying and the consumer experience with Andy Wright, Managing Partner of Vinart Dealerships.
The conversation with Andy Wright delves into the current state of the automotive market, where dealerships are feeling pressure on new car front-end grosses due to a resurgence in supply levels, returning to pre-pandemic conditions for most brands. While the new car market faces challenges, the used car segment remains undersupplied, prompting consumers to consider leasing new vehicles as a viable alternative. Wright notes that many consumers are transitioning from used to new car purchases, driven by affordability concerns and the attractiveness of leasing options.
Despite recent interest rate cuts from the Federal Reserve, Wright observes that banks have not adjusted their auto loan rates accordingly, limiting financial relief for consumers. The discussion also highlights the growing demand for electric vehicles (EVs), particularly hybrids, as consumers express increasing interest in electrified options. However, range anxiety and inadequate charging infrastructure continue to pose significant barriers to fully electric vehicle adoption.
Turning to the Amazon-Hyundai partnership, Wright acknowledges the ongoing enrollment of dealerships in the program. While Amazon navigates the complexities of automotive retail for the first time, he believes that consumer interest in completing transactions on the platform remains uncertain. Wright emphasizes the importance of flexibility in sales strategies, encouraging dealerships to adapt to consumer preferences, whether that involves online, in-store, or hybrid shopping experiences. He warns of the potential for “showrooming,” where consumers might utilize dealership resources before opting to purchase vehicles online, underscoring the necessity for dealerships to enhance their customer engagement and service offerings.
"I think that if you look at the percentage of transactions that take place entirely online... it still represents a very small percentage of the sales that happen in this country. Overwhelmingly, American consumers are telling people that they still want to see, feel, touch, smell, and drive it before they buy it." – Andy Wright
