The concept comes to Australia from the US where only Tesla is allowed to sell cars without a franchise dealership base, and then only in a handful of states.

Amazon is trialling online new-car sales around the world and – as expected – is up against opposition from dealerships. So rather than fight the existing dealers, it is looking at becoming the sales arm of those dealerships.

As Amazon looks to Australia for expanding online sales, they are also looking at new-car sales but without owning property for sales, service, parts and storage.

Amazon last month was reported as opening a business unit in Belgium that will allow it to retail cars throughout Europe. It has also announced online the ability for prospective buyers to test drive some Mercedes-Benz models as part of its business expansion.

In Italy, it already has Amazon Vehicles that is an online sales service. It allows buyers to pick up their new car from a Fiat dealership within two weeks of a successful order.

Volvo in the US offers “concierge sales online” that is an online sales and order system that only involves the dealer when the buyer collects the car.

KPMG director of motor industry services, Steven Bragg, told GoAutoNews Premium that Amazon would not have the rights from the franchisor to sell new vehicles though would be a car-buying information centre.

He said Amazon would be able to sell parts and accessories that could impact on non-genuine parts sales by dealers, much in the same way as eBay, Gumtree and other sites have occupied the same space.

“I think that Amazon will start out by selling used cars online, competing with sites such as Carsales.com, and then could try and push for legal changes allowing them to sell new cars as well,” he said.

“That may take some time. However, the retail motor industry has shown to be very resilient and will adapt to any changes.

“The dealers that are flexible, adaptable and customer focused will be well placed to ride out any disruption caused by new entrants into the market.”

The moves by Amazon and Volvo are seen as early stages of separating the sales division of the car-buying process. It could mean test drives of new cars, servicing and repair, and storage facilities would be handled by a dealership while the sales aspect would be done online.

Even parts supply could be an online service with parts going direct from the original equipment manufacturer (OEM) – or aftermarket supplier – to the end user to reduce the need for multiple warehousing of components.

Investment company Morgan Stanley agrees that Amazon is poised to sell cars but may be constrained by US franchise agreements.

However, that does not stop it marketing used vehicles and parts and accessories, it said.
Amazon put its toe into the US market’s annual $A1.5 trillion new and used-car sales market with the launch almost 12 months ago of Amazon Vehicles.

Morgan Stanley analyst Brian Nowak, speaking to Business Insider magazine, said “this could change over time though dealer franchise laws prohibit the sale of new vehicles over the internet, but used cars and parts are largely allowed”.

By Neil Dowling