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,
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,
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,
sank 7.4% in afternoon trading, after being down about 4.8% just before Amazon’s announcement. Carvana shares
CVNA,
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,
slumped 6.6% after being down 5.5% pre-announcement, and CarGurus Inc. stock
CARG,
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%.
This post was originally published on Market Watch
