The Strategy Behind Amazon and Fiat-Chrysler Partnering To Sell Cars Online

As always, Amazon is pursuing a multi-pronged strategy. In this case it is to promote sales of its increasingly popular Alexa digital assistant as an auto accessory, to accumulate yet more data on current and potential customers - and to throw another multi-billion dollar industry into disarray, from which it can then take strategic advantage.

Because Italian consumers indicated that they are open to buying a car online but want to pick it up at a dealer, this may also give impetus to Amazon's push into bricks-and-mortar retailing as a way of optimizing convergence and profits across channels. JL


Agnieszka Flak and Stefano Rebaudo report in Reuters, Taylor Soper reports in GeekWire:

Recent deals to integrate the company’s digital assistant Alexa into various car brands point to the possibility that Amazon is increasing its focus on the $1.2 trillion in annual new/used car sales. Research revealed that half of Italians were willing to buy a vehicle online but 97 percent still preferred to pick it up at a traditional dealer. It’s not clear if Amazon has its own inventory of vehicles.

Retuers Fiat Chrysler Automobiles (FCA) (FCHA.MI) said it has teamed up with U.S. internet giant Amazon (AMZN.O) to start selling cars online offering an additional discount.

Initially only Italian buyers will be able to purchase their cars with a simple click online and the offers on Amazon.it will be limited to three models - the 500, the Panda and the 500L.
FCA said the choice was deliberate because the Panda is Italy's biggest selling car, while buyers of the 500 and its larger 500L version embody the young and adventurous nature this initiative is trying to appeal to.

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"The time has arrived to give consumers a new, more efficient and transparent way to choose a new vehicle," Gianluca Italia, responsible for Fiat Chrysler in Italy, said during an online press conference.
The manager at the world's seventh largest carmaker said the partnership will appeal to buyers looking for deals from the comfort of their own home, adding that existing promotions will be improved by up to 33 percent for online customers.
He said research had revealed that half of Italians were willing to buy a vehicle online but 97 percent still preferred to pick it up at a traditional dealer.
So, after making their clicks online, buyers will be contacted by Amazon to decide on a dealer where they can finalize their purchase and pick up the car. The vehicle should be ready within two weeks of the initial click.

GeekWireAmazon continues to show interest in the auto industry.
The tech giant will sell vehicles in Italy via a new partnership with Fiat Chrysler, Reuters reported. Italian buyers will be able to purchase three Chrysler models — the 500, the Panda and the 500L — on Amazon with an “additional discount,” Reuters noted.
Amazon will contact buyers after they click online and help them finalize the purchase at a physical dealership. It’s not clear if Amazon has its own inventory of vehicles. The entire process takes two weeks.
This is another key step signaling Amazon’s ambitions for auto sales. In August, the company introduced Amazon Vehicles, a new section of its website that includes specifications, prices, images, videos, and customer reviews for thousands of new and classic cars. In addition, prospective buyers can ask owners questions about their cars.
Earlier that month, Amazon unveiled a program called “Prime Now. Drive Now,” which lets L.A. and Orange County members of Amazon’s $99 per year Prime program book 45-to-60-minute test drives in the 2017 Hyundai Elantra. Members schedule test drives through Amazon’s Prime Now portal and are directed to a local dealership if they want to purchase.
Amazon also has Amazon Automotive, which allows users to upload information about their vehicles and find the right parts to keep them up to speed.
The Amazon Vehicles announcement, the Hyundai partnership and recent deals to integrate the company’s digital assistant Alexa into various car brands point to the possibility that “Amazon is increasing its focus on the $1.2 trillion in annual new/used car sales,” reported Morgan Stanley in a note from August.
Morgan Stanley also wrote that Amazon has a better chance of getting into used car sales, where it won’t be burdened by legal barriers like dealer franchise laws that prevent direct new car sales over the internet.
And it’s not just vehicle sales that Amazon is interested in. Amazon’s streaming video service will begin airing a new series called The Grand Tour from ex-Top Gear hosts Jeremy Clarkson, Richard Hammond and James May.