Written by: Extended Auto Warranty
Last updated: July 31, 2020
Already the most valuable retailer in the United States, Amazon is now looking to extend their reign overseas. Jeff Bezos’ company has become dominant in more areas than just e-commerce, and it appears that Amazon’s next groundbreaking move is to enter into Europe’s automobile industry.
In many ways, Amazon’s decision to experiment with the sale of automobiles was foreshadowed by some of the company’s actions last year. In November 2016, the company announced that customers would be able to purchase Fiats online through Amazon’s website, although this was initially restricted to Italian purchasers exclusively. It is clear now that this experiment has led to a massive undertaking, and could fundamentally change the way that consumers go about buying a car.
The company has already released a test-drive option for Mercedes-Benz vehicles. If this grows into a staple of Amazon’s automobile wing, it could drastically change the role of car dealerships altogether. Rather than focusing on physically selling their vehicles, dealerships may adopt more of a repair and servicing role. Every automobile company already has a realistic online sales process, but Amazon seems poised to create a compilation of all vehicles to sell on their site.
Although Amazon is built to succeed in essentially any of its business ventures, there are still some obstacles that must be overcome in order for it to compete with popular European dealerships and vendors early on. Car buyers, more so than customers of other products, typically seek significant expertise in the industry. It is unclear if Amazon will be able to offer that, since the company is now spread out among a number of industries. Amazon’s customer research has determined that Europeans are generally twice as likely to purchase a car from a dealership, automaker website, or third-party vendor, than from a multi-dimensional online retailer like Amazon.
To address this, Amazon has already named Christoph Moeller to lead all automobile-related endeavors. Moeller is a specialist in the European car industry and will reassure customers of Amazon’s knowledge with regards to automobiles. Moeller has said that Amazon is also hiring a number of car sales executives to help smooth out the transition into the new industry.
Amazon’s transition into the automotive industry could also shake up the way people test drive cars. More people than ever are buying cars without needing to physically drive it first, but a large majority of customers still end up taking their car for a spin at least once before purchasing it. It is possible that over time, Amazon will be able to find a way to offer some sort of trial process or test drive, perhaps out of partner dealerships, but until then it may be difficult for Amazon to fully capture the attention of European consumers looking to buy a car.
Although it was rumored that Belgium would be the headquarters of Amazon’s automobile branch, the company has since announced that it will run all car sales out of Luxembourg, and is looking to add a pilot market in Britain as well. Other than that, Amazon has remained relatively silent about this matter, instead allowing their recent takeover of Whole Foods to grab international attention. It remains to be seen how the innovative company ends up making the transition to part car-retailer, but one thing is for sure: if any company could pull it off, it’s the internet giant from Seattle, Washington.
