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Amazon. A giant in anything it sets its sight on. Now though, Amazon has decided to break into the automotive market, with excitement following its every move.
Amazon.com, Inc. is launching a new automotive service geared toward car buyers. This new service is another sign of the company’s power, and its ability to structure its reach intelligently and proactively. The new service, dubbed Amazon Vehicles, will provide online vehicle research, enhanced vehicle insight and opinion, and reviews. This new move is telling however, because what Amazon is planning on doing next will be the most interesting. For now, focusing on what Amazon Vehicles will be providing, and what existing companies they will be competing against, is the most interesting fact of late.
For the near future, Amazon Vehicles will not allow consumers to purchase a vehicle, or at least the current model will not allow this. Not to say that in the future Amazon will find the system that works for such an online ability, one that allows a complete front to back purchase of vehicles. The new platform however, has a plethora of abilities. Users of the new system will be able to utilize an entire community of research tools to better decide their vehicle of choice. In this platform, content will be able to be broken into different sections according to models, changes to existing models, value, and the obvious overview and features. One exciting new feature is the social media element that will be engaging more real life users than ever before. Using social media, Amazon Vehicles will allow users to upload videos and photos of their vehicles, and to share that media with other users. In addition to uploading, the users that utilize the upload feature will be able to answer specific questions relating to their car. All of which will be easily accessible in a way to compare vehicles.
This on its own is a very exciting step for Amazon as a whole, however what could become of this platform is the true question to ask. Is amazon simply doing research and development in its quest to jump into the online car buying process? Possibly. For the time being, this model of Amazon’s new platform is doing well to compete with other similar websites, those being AutoTrader/KBB, Edmunds, and Cars.com. However, TrueCar is widely believed to be the next victim of Amazon’s reaching power. An example of this “worry” by investors was seen in wake of Amazon’s announcement; TrueCar’s stock dropped almost 14% in the 3 days following Amazon’s release. While this may be an issue for the giants in the automotive research market, what is the most worrisome is if Amazon ever decides to take it one step further. From car research to car buying.
Amazon Vehicles could not only disrupt the car research model; it eventually could disrupt the dealership marketplace as well. If Amazon point their new platform in the direction of dominating the automotive marketplace, both dealerships and their consumer will take a completely different outlook on Amazon’s automotive presence. For the consumer, it could provide a no-hassle and no-haggle car shopping experience, one that TrueCar is hoping to hold onto at the moment. On the dealership side of the equation, profits could see a dive depending on how far Amazon take this. Automakers could be affected with Amazon’s enormous following, and be forced to meet certain prices that “the people” demand. Out of all of these scenarios, only Amazon know where they will eventually take this platform.
Amazon has an opportunity to create a Trillion Dollar revenue stream with Amazon Vehicles. Can the automotive industry keep going on its current path? Time will tell. However, the simple fact is, whatever Amazon decides to try they will succeed in, one way or another.