Amazon to launch online vehicle sales, and stocks of CarMax, Carvana fall

News Room

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,
-0.26%
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
005380,
-0.22%
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,
-5.56%
sank 7.4% in afternoon trading, after being down about 4.8% just before Amazon’s announcement. Carvana shares
CVNA,
-5.27%
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,
-6.96%
slumped 6.6% after being down 5.5% pre-announcement, and CarGurus Inc. stock
CARG,
-2.62%
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%.

Read the full article here

Share this Article
Leave a comment