AMSTERDAM — The entry of Amazon.com into car sales will prompt “a painful race to the bottom,” according to Steve Greenfield, CEO & founder of U.S.-based Automotive Ventures.

“Amazon will extract the predominance of the value … They will evaporate a lot of market cap” for dealers and marketplaces,” he added, comparing it to newspaper advertising, which has been cannibalized by online ads over the past 30 years.

Greenfield noted that, in the U.S., there was now more than one Amazon Prime account per household (180 accounts for 131 households) and that 60% of product searches in the U.S. now started on Amazon, rather than Google.

Describing Amazon as “an A/B testing machine,” he asserted that “Amazon owns the audience, adding that “[the] automotive category is too big for Amazon to ignore.”

According to Greenfield, EV-maker Tesla and digital auto retailer Carvana have demonstrated that “driveway delivery can work,” providing an opening for the ecommerce giant, which has previously shied away from auto because it “fundamentally couldn’t control face-to-face interaction between consumers and dealers,” Greenfield said.

Auto marketplaces, dealers and OEMS are keeping a very close eye on Amazon’s partnership of Amazon with Korean carmaker Hyundai to sell vehicles in the U.S., he noted.

Greenfield urged the European auto industry to “Observe what’s going on the U.S. … [and] figure out what your reaction is going to be.”

He was speaking on the first day of the AIM Group’s AutosBuzz conference.

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