Online giant Amazon '˜weighing move into UK cars market'

Amazon is understood to be weighing up a corporate partnership that could see it begin selling cars to UK consumers on its website in a rerun of what it has done in European markets, including France and Italy.

Amazon is said to be planning to pursue a partnership that could see it begin selling cars to UK consumers on its website. Picture: Nick Ansell/PA Wire

Sources said it could see the online retail giant team up with a vehicle manufacturer to offer promotions and receive orders for new cars from UK customers through Amazon’s platform.

Amazon has clinched a similar deal with Seat in France and its Fiat welcome kit was introduced in Italy through its dedicated country website last year.

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News of Amazon’s interest in the UK recently re-emerged in an article by German trade magazine Automobilwoche, which outlined the group’s plans to base its online car unit in Luxembourg before launching new operations in the UK. Amazon said it does not comment on speculation.

The programmes offered in France and Italy allow online customers to access promotions or reach a price arrangement with the car manufacturer through the Amazon platform.

Shoppers can then lock in a reservation for a set price, arrange a test drive, buy that car through the local dealer or even organise home delivery.

Amazon, which celebrated 20 years as a publicly traded company last month, has been criticised for its impact on local businesses that have struggled to compete with its aggressive push into books, clothing, groceries through AmazonFresh, and now cars.

But experts say Britain’s leading competitors, including classifieds group Auto Trader, have little to fear in terms of competition from Amazon in the car sales business. In a note published by earlier this week by Exane BNP Paribas, executive director of media equity research William Packer said: “Overall the reaction looks overdone to us.

“Based on our reading of the article and conversations with industry contacts (we note Amazon have provided no comment), we understand this is a continuation of Amazon’s existing European automotive strategy.

“They currently offer lead generation for French and Italian OEMs (original equipment manufacturers) with the orders fulfilled by local dealers. The article suggests this is extending to the UK, but the language of the article suggests this remains focused on the new car space.”

Packer noted that more than 90 per cent of Auto Trader revenue comes from the used car segment, an area that Amazon does not appear to be pursuing.