Growing Concerns for a Retail Business Effect on the Automotive Industry
By Desiree Homer
Automakers are treading cautiously with a keen eye on Amazon. With its Alexa in-vehicle assistant, recent investments in the EV industry and Rivian, and its cloud platform, Amazon is breaking into the automotive industry. Considering the impact Amazon has had on the retail business sector, should automakers and dealerships be worried about a similar fate?
Amazon Is Taking A Flanker Approach to Automotive Infiltration
Amazon isn’t launching Alexa branded vehicles at the franchise dealer level yet. However, Amazon does have automotive industry entry points in a variety of other areas, including vehicle technology. Amazon is also vested in company-sponsored electric delivery van orders with Rivian, and the Aurora, a self-driving vehicle prototype. Amazon announced in January its plans for the Alexa Auto software kits for the auto assistance tech upgrades to existing vehicles, as well as its rollout of the Echo Auto device internationally. Consumers are creating a demand for in-vehicle connectivity tech, and manufacturers are forced to offer integration, to meet that demand.
GM announced last fall it would fully embed Alexa Auto into its vehicle lineup for 2020, and offer over-the-air updates for older 2018 and 2019 models already on the road.
Ford integrated Alexa with its Ford Sync 3 platform in 2017.
FCA updated its signature Uconnect 5 for Alexa implementation and voice command options.
BMW launched its own ‘Intelligent Personal Assistant’ tech in 2018 but also integrated Alexa into the existing vehicle software.
Some Automakers Are Developing Their Own In-Vehicle Tech
With concerns about giving the tech-based power over to Amazon entirely, some auto brands are developing their own platforms for voice assistants and connectivity. Manufacturers and industry suppliers are taking a look at what technologies they can bring in-house, to avoid complete reliance on data and infotainment products from Amazon, according to Brian Rhodes, an IHS Markit analyst. Jeff Hannah, an analyst and director for the North American automotive tech research company told Automotive News that BMW and Mercedes are both pursuing their own personal assistant tech, with brand-specific functionality.
What Impact Could Amazon Have on Your Dealership?
For now, operations at the franchise dealership level are minimally impacted. Your teams are learning the newly added in-vehicle tech and Alexa assistant features, to better introduce them to your car buyers. But, you aren’t competing with an Amazon vehicle for market share. As Amazon continues to test the waters with various partnerships across the automotive industry, everyone is on high alert. Knowing how detrimental the Amazon business model was to the retail sector, automakers are taking cautious and proactive steps to avoid a similar fate. What that may mean to your dealership, is ongoing brand tech to learn, and increasing Amazon-based tech to teach new buyers and to repair within your service departments.
Amazon revolutionized how consumers buy things. It dominated how we engage the internet and consume reading material. Amazon devices allow us to turn on our ovens, lock our homes, and check the weather. Now, Amazon is aiming for our vehicles. As consumers love to embrace the tech from behind the wheel, automakers are planning for more cautious partnerships instead.