Future of Amazon in the Automotive Industry, 2017–2025

Future of Amazon in the Automotive Industry, 2017–2025

  • August 2017 •
  • 62 pages •
  • Report ID: 5075871 •
  • Format: PDF
At Least 5 of the Biggest OEMs Expected to Partner in Retail by 2020

Amazon has established itself as a global powerhouse in the online retail space. In some locations, it sells everything from books and electronics to even food. It has been able to continuously innovate in terms of its logistics, products offerings, and customer interaction experience.

Sellers have been using Amazon to sell automotive products, including spare parts and accessories, and it is stepping up its game to take on established players who sell parts online. Amazon has also created a dedicated portal called Amazon Vehicles to educate customers about vehicles and provide relevant parts, accessories, and services. The next step in the evolution is to sell vehicles, but whether it will be new or used-and whether it will be in North America or Europe-is what industry players are watching.

Digital retail is a growing trend, and brick-and-mortar businesses are increasing their online presence to meet customer demand. There will definitely be an increase in the number of automotive retail businesses-both new and used car-and an increase in competitiveness by offering more value to the customer through an online onslaught.

Even though the path forward for Amazon in revolutionizing the automotive retail space, significant challenges exist. In markets where OEMs can sell directly to customers, they will be able to increase profit margins considering there are no middlemen, including Amazon. OEMs can independently develop, maintain, and innovate their online sales presence since selling on Amazon requires abiding by its rules.

Supply chain and logistics complexities are reduced significantly because OEMs can manage this process entirely on their own. Amazon promotes its Fulfillment by Amazon tag, but this will be prove to be difficult for it to store inventory. Amazon will have to battle already-established new and used car businesses to create a name for itself in this space. It also has to be able to convince customers of the idea of buying cars online.

The top 5 questions that this study will answer are:
• What business opportunities in the automotive industry is Amazon pursuing?
• What are the key advantages that Amazon has, and how it can leverage these to create a substantial impact in the automotive industry?
• What are the key trends in new and used car sales in select regions, and how could Amazon disrupt these markets?
• How will Amazon use its advanced artificial intelligence software and hardware devices to empower automotive OEMs and customers?
• How would Amazon penetrate other areas of the automotive industry, including in-car connectivity and autonomous technology, and compete with the established players?