Amazon takes on the Garage; Walmart eyes Car Dealerships
Not content just to upset the book market, online retailer Amazon now seems to be taking aim at the car parts industry as it moves into selling car parts, and who would be brave enough to say that CEO Jeff Bezos won’t take a hefty chunk out of the US$50 billion car parts industry. Amazon started to trade in car parts late last year in 40 cities worldwide, where they managed to have a same day delivery service, with parts costing on average 23% less than if you went to a traditional car parts retailer, according to a report from investment banking firm Jeffries LLC.
At present, the service seems to be available only in the US of A, where the established brands like Advance Auto Parts, Autozone and Pep boys are sure to start to feel the pinch, not to mention authorised dealers who will find themselves competing with the cheaper alternative. According to a report in the New York Post, Amazon has already signed a deal with the likes of Bosch and Dorman, who are amongst the biggest car part manufacturers in the US, and the company is looking for at least a 50% expansion of this business over the course of 2017.
A Dorman water pump sold at Autozone (top) is US$34.29 cheaper at Amazon (bottom), with free same day delivery. Not to be left out, the world’s most profitable company and probably the biggest bricks and mortar retailer, Walmart, has set its sights firmly on car dealerships as it dips its toes into the car sales business.
Last year, the retailing giant trialled its CarSaver concept at a store in Stuart, Florida and found that customers could save an average of US$3000 off a car’s sticker price, with 80% of the customers who set up appointments making a purchase.
The next phase will see Walmart undertake a larger test, with 25 stores in the South West of the country adding a CarSaver kiosk, where customers will be able to view their options and shop for financing and insurance. The cars will not actually be at the Walmart but connected to a dealership within a 15-mile radius of the store. Assuming that the larger scale test works out, and Walmart expects it will, then the retailer will start to roll out the service to all of their stores nationwide in two years’ time.
We wonder when we in Asia will be able to pop down to the shops for a loaf of bread and come back with a new car.