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June 13, 2017

Amazon ‘to sell cars in UK’ – reports

The UK's online car retail sector could be about to see disruption with the arrival to the market of online retailer Amazon, according to reports.

By David Leggett

The UK's online car retail sector could be about to see disruption with the arrival to the market of online retailer Amazon, according to reports.

Bloomberg noted that shares at the Auto Trader Group Plc fell sharply on the reports. Amazon is currently testing car sales in Italy and already sells cars in the US. In Italy, Amazon has partnered with Fiat Chrysler Automobiles (FCA) and offers selective models – the 500, Panda and 500L.

Lisa Bedwell, senior research director at consultancy Future Thinking, described the move to sell in the UK as potentially a 'game changer'.

"Amazon's ambitious move to take on the automotive market and sell vehicles directly in the UK is an exciting game changer which will be making established automotive traders nervous this morning," she said.

"While key existing players such as AutoTrader are likely to take steps to offer a more tailored, specialised service to differentiate from Amazon, for automotive brands there is an opportunity to push for these platforms to offer more space where they can build a closer relationship with customers."

"Trust is now at a premium in the automotive industry, particularly in the wake of the recent Volkswagen's emissions scandal, with the brand-customer relationship more important than ever for the sector. Brands may benefit from Amazon's positive reputation, but should also be seeking to create more opportunities to communicate and engage with customers directly through these platforms."

Automakers have long wrestled with putting more of the sales process online to remove cost, but it has proven difficult in the context of the entrenched traditional relationship between car buyer and dealer. Also, the purchase is a more complex one – with aftermarket considerations, for example – than for lower priced consumer goods which are increasingly shipped via online retailers.

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