Amazon to launch online vehicle sales, and stocks of CarMax, Carvana fall
By Tomi Kilgore
Hyundai will be first brand available in Amazon's U.S. online store, starting in 2024
Shares of auto retailers CarMax Inc. and Carvana Co. took a dive Thursday, after Amazon said it would launch vehicle sales online next year.
Amazon (AMZN) said that starting in 2024, auto dealers will be able to sell vehicles on Amazon's U.S. platform for the first time. The e-commerce giant said Hyundai Motor Co.'s (KR:005380) vehicles would be the first brand available to buy online.
"This new digital shopping experience will make it easy for customers to purchase a new car online, and then pick it up or have it delivered by their local dealership at a time that works best for them," Amazon said in a statement.
Once a vehicle is selected in their area, based on a range of preferences, customers will be able to check out online with their chosen payment and financing options.
CarMax's stock (KMX) sank 7.4% in afternoon trading, after being down about 4.8% just before Amazon's announcement. Carvana shares (CVNA) sank 8.5%, after being down 4.0% pre-announcement.
Among others that were hurt by Amazon's news, shares of online auto-information platform TrueCar Inc. (TRUE) slumped 6.6% after being down 5.5% pre-announcement, and CarGurus Inc. stock (CARG) swung to a loss of 6.1% from a gain of 1.7% on the news.
Meanwhile, Amazon shares lost 0.6%, and have now shed 2.4% since it closed at a 15-month high of $145.80 on Tuesday.
As part of Amazon's partnership with Hyundai, the South Korea-based automaker named Amazon's AWS as its preferred cloud provider. Starting in 2025, Hyundai's vehicles will provide access to Amazon's hands-free Alexa experience.
Amazon's stock has still run up 69.5% year to date, while the S&P 500 index SPX has advanced 17.1%.
-Tomi Kilgore
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(END) Dow Jones Newswires
11-16-23 1421ET
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