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GLOBAL electronic commerce company Amazon has dipped its second toe into the automotive industry by becoming Fiat Chrysler Automobiles’ online retailer for selected models.

The online purchase of cars is initially confined to Italy and limited to three FCA vehicles, the Fiat 500, Panda and 500L. It follows a trial in October when Spanish car-maker Seat used Amazon’s online site to sell a limited-edition variant of its Mii hatchback in France.

The move by the online book and household goods retail giant into car retailing has led a leading European car industry boss to question whether the industry was right to ask for larger and more luxurious dealerships, suggesting the investment in buildings might be better spent in online dealerships.

Amazon is a hub for consumers. Under its car-buying model, it offers a simple click-through menu to allow buyers to order a car. Buyers are then contacted to confirm what dealership will deliver the car.

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The involvement of dealers in the process was in response to FCA research in Italy that found that 97 per cent of respondents preferred to pick up the car at a traditional dealership.

The FCA partnership is part of a broadening of online auto ventures by Amazon. The company this week released, to rave reviews, the first episode of The Grand Tour video motoring show featuring former Top Gear presenters Jeremy Clarkson, Richard Hammond and James May.

The models were selected by FCA because the Panda is Italy’s biggest-selling car and the 500 and 500L are aimed at young buyers who are likely to more easily embrace the online buying process.

FCA also said that online buyers would be able to have further savings through existing promotions, but specified that this did not mean the cars would necessarily be cheaper. The company would not answer questions about cars being cheaper to buy via the Amazon process.

FCA head of fleet and business sales in Europe Gianluca Italia said in a statement that: “The time has arrived to give consumers a new, more efficient and transparent way to choose a new vehicle.”

Fiat 500L

Fiat 500L

He said that the partnership with Amazon will appeal to buyers looking for deals from the comfort of their home, but still wanted to collect the car from an FCA dealer.

Amazon last year started an online portal for US buyers to research vehicles that included pricing, sales and discounts, images and customer reviews.

Amazon is finding it difficult to begin online car sales in the US because new-car dealers in many states in the US are protected by state laws against alternative sales channels which bypass the dealer network.

Media reports suggest that Amazon may follow the TrueCar process, a US website that allows online sales but does so by linking buyers with dealers. If a sale is made, TrueCar is paid a referral fee.

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Amazon may be able to offer a similar service to buyers by signing up US dealers and potentially, given its market leverage, have a substantial referral income.

Amazon’s foray into online sales started in France last October when Seat wanted to sell a limited-edition version of its Mii light car. The Mii is Seat’s version of the Volkswagen Up.

Seat made 750 “Mii by Mango” models, with input by the Mango design studio, to appeal to women buyers. For the online exercise, it offered only 15 units of the €10,950 ($15,200) fashion-inspired car which sold within two weeks.

Seat orders for French customers could be placed online and the car would be delivered to the owner’s house within 72 hours.

Seat Mii

Seat Mii

The shopper was required to pay a €500 ($A720) deposit and would then be verified as a bona fide buyer before being contacted by a Seat representative to discuss finance options. The deal was supervised by the closest Seat dealer.

Seat president Luca de Meo said this year that all car-makers needed to consider whether the investment they expect franchised dealers to put into expanding showrooms with reducing floor visitors could be better spent on digital tools.

“It makes you think, ‘do I need exactly the same thing as I had 20 years ago when people are simply not going to the showroom any more?’,” he said.

“So maybe rather than asking someone to treble the size of their showroom because we have more cars, we have to think that maybe it’s more important to invest in a decent configurator that really works and connects with the dealer.”

By Neil Dowling

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