Why the Hertz-Amazon deal poses threats to auto dealers
Recently announced Hertz And Amazon car Automobile industry analysts will facilitate rental automobile companies directly to consumers, but they can enter a historical profit source for automobile dealers.
The announcement that the car rental company will come together with the e-commerce giant increased its shares. Hertz sells most of its fleet directly to consumers – lists them on their website and others. Karvana.
However, selling the rental fleet directly to consumers is an important part of Hertz’s return plan.
“This is an important part of the business, right?” said deutsche bank analyst Chris Woronka. “Every year they sell a few hundred thousand cars, we are talking about the inventory worth a few billion dollars re -sold in the United States. Obviously the name of the game is to sell at the highest possible price.”
Amazon provides another channel for this. The e-commerce giant first announced that it entered automobile sales in 2023 and through the Hyundai dealers, which he has expanded since then.
Shopping in Amazon can finance and fill the documents, but they are still versatile to buy the car. New automobile sales in the USA are governed by laws that protect dealers against direct sales, but some companies Tesla– ClearAnd Rivian In the first place, he chose not to have any dealers and he found a way to sell it directly to the public.
Hertz partnership is actually the same as the Hyundai bond. Until now, Amazon has not kept his own inventory. Instead, it offers the software for online execution through its website.
It is a very different way to do something very different from Amazon, known for holding the warehouses of goods.
“Amazon is trying to enter the automotive retail segment in an ironic way,” said Steve Greenfield, General Partner of Automotive Ventures. “Ultimately, what gives them a constantly heartbreaking experience is that they can control the packaging experience with any other product category. When a box comes to your door, they know exactly what you have opened. It is completely different with automotive retail.
However, John Possumato, a former Chrysler Plymouth seller and entrepreneur, said that the Hertz-Mamazon partnership should give the dealers a reason to worry.
One Open Letter to National Automobile Dealers AssociationPossumato, like Hertz, said that rental companies can buy cars collectively and that they are entitled to discounts. This allows the company to sell cars with less than a seller. Possumato said there was a problem in the past. Hertz already runs 45 retail lots around the United States.
However, the digital period is uploading the problem in a super way.
“Amazon is the largest Merchandizer retailer in the country and you have the largest or one of the biggest rental fleets, and they come together to sell these cars.” He said.
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