Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  Equities  >  Nasdaq  >  Amazon.com, Inc.    AMZN


SummaryAll NewsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Pandemic revs up race for U.S. online car sales

share with twitter share with LinkedIn share with facebook
08/04/2020 | 02:08pm EDT
Brandon Parrum, general manager of CarMax's Des Moines store, shows where customers who arrange to buy a car on line can come for

(This August 3 story, corrects name of Vroom CEO in paragraph 12 to Hennessy)

By Nick Carey

After years of being part of a future that never quite arrived, the coronavirus pandemic has put U.S. online car sellers on the map.

Now comes a race to spend vast sums on digital commerce platforms specifically designed to handle auto sales. Without deep pockets, many startups and others trying to join the online game will likely be left in the dust.

"The big three (auto) e-commerce players will grow substantially, but it will be hard to be a new entrant," said Toby Russell, joint chief executive officer of Shift, which will go public to join rival Carvana and Vroom later this quarter.

"The pay to play on this thing is in the hundreds of millions and the early journey is hard, especially building out the technology," Russell said.

Online sales still only account for around 1% of the roughly $840 billion Americans spend annually on around 40 million used cars. But after numerous U.S. states went into COVID-19 lockdowns in March, the advantage of socially-distant online sales has come squarely into focus.

"With coronavirus we've seen an additional shift in desire to purchase vehicles online," said Carvana CEO Ernie Garcia, whose company has grown by triple digits for six years running.

Investors are buying in. Vroom's shares are now trading at more than double their $22 launch price on June 8. Carvana's market value is near that of No. 2 U.S. automaker Ford Motor Co, though it has yet to post a profit.

In a sign of the times, an April survey by CarGurus Inc, an online marketplace for new and used cars, found 61% of people shopping for cars were open to buying online. That compares with 32% before the pandemic.

Selling vehicles online with no physical showrooms requires more than just a nifty app though.

The $2 billion Carvana has spent since 2013 rolling out its digital network has included payments for technology to evaluate trade-in vehicles, financing for car loans, switching car titles across U.S. states with different rules and a logistics network to recondition, store and deliver thousands of vehicles to customers' homes.

"It's expensive to build up an entirely new supply chain that's nationwide and supports tens of thousands of cars," Garcia said.

Rival Vroom has spent around $1 billion on its online platform and inventory so far. It hopes some day to also use the platform to sell auto parts or insurance, or to serve as a marketplace for smaller auto retailers, CEO Paul Hennessy said.

Vroom could provide smaller dealers with reconditioning services, logistics and a vast pool of potential car buyers -- for a fee.

Shift's Russell, meanwhile, also hopes to host other dealer's vehicles on his company's platform.

The three main online sellers say they have no interest in new car sales because they are unprofitable and dealer franchise laws make selling across state lines difficult. Of the automakers, only Tesla Inc has avoided franchises and always sold vehicles online.

CarMax, the No. 1 used car retail chain, has spent

over $300 million rolling out a digital platform to accompany its 200 U.S. stores. It is still working through the logistics of serving America's vast geography.

"It's not for the faint-hearted," said CarMax Chief Marketing Officer Jim Lyski.

Lyski and other executives say other major brick-and-mortar auto retail chains will likely roll out online sales, but the huge investments involved will limit digital competition.

"I think the largest players are the only ones that can actually afford to build that capability," Lyski said.

Industry experts say Amazon.com Inc, which provides auto research for consumers but does not sell cars, has a huge potential in online vehicle sales. But the e-commerce titan, which has seen its profit surge during the pandemic, declined to comment.

"This isn't something we'd speculate on," said Amazon spokeswoman Lori Torgerson.


CarMax launched "contactless" curbside pickup during the pandemic, a popular choice for online customers. It also offers free home delivery up to 60 miles (97 km) from a dealership, a service available to most customers.

But home delivery is cost-prohibitive in some areas, or state regulations prevent it, CarMax said.

CarMax's Des Moines store, for instance, does not offer home delivery, though general manager Brandon Parram said some customers have asked about it.

"I know it takes time to figure out how to make it work," Parram said, "but I'm a fan of any new way to give customers the options they want."

Major automakers have been pushing for more online new vehicle sales, especially after COVID-19 shuttered many dealerships.

In April, Fiat Chrysler Automobiles NV (FCA) launched online shopping tools allowing U.S. customers to buy a vehicle through a franchise dealer.

But automakers face a big potential challenge from dealers, a powerful lobbying group. Laws restrict direct online sales by auto manufacturers in some parts of the country with franchised dealers.

"The automakers built this system and they have to live with it," said Peter Bible, a former executive at General Motors Co. "They are trying to turn a battleship on a dime and it just doesn't work that way."

(Reporting by Nick Carey; Editing by Tom Brown)

Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM, INC. 2.55% 3174.05 Delayed Quote.71.77%
CARGURUS, INC. -0.07% 21.93 Delayed Quote.-37.66%
CARMAX, INC. 1.08% 95.05 Delayed Quote.8.42%
CARVANA CO. 7.26% 218.02 Delayed Quote.136.85%
FIAT CHRYSLER AUTOMOBILES N.V. -1.49% 10.478 Delayed Quote.-19.39%
FORD MOTOR COMPANY 2.77% 6.69 Delayed Quote.-28.06%
GENERAL MOTORS COMPANY 1.52% 29.44 Delayed Quote.-19.56%
LVMH MOËT HENNESSY - LOUIS VUITTON SE -0.09% 405.5 Real-time Quote.-2.00%
TESLA, INC. 3.40% 421.2 Delayed Quote.403.43%
VROOM, INC. 2.71% 50.87 Delayed Quote.0.00%
share with twitter share with LinkedIn share with facebook
All news about AMAZON.COM, INC.
03:54aWalmart in talks for up to $25 billion investment in Tata's 'super app' - Min..
09/28AMAZON COM : U.S. charges former Amazon manager and her family members with insi..
09/28Wall Street closes higher as energy, financials lead broad rally
09/28Wall Street jumps, financials take the lead
09/28Tech, bank shares drive Wall Street higher
09/28AMAZON COM : to hold Prime Day event on Oct. 13-14
09/28Wall Street jumps as tech, bank shares gain
09/28Wall St kicks off week on high note as tech, bank shares gain
09/28'Take home' lawsuits over COVID infections could be costly for U.S. employers
09/28Banks, travel stocks set to lead Wall Street higher
More news
Financials (USD)
Sales 2020 369 B - -
Net income 2020 15 998 M - -
Net cash 2020 51 861 M - -
P/E ratio 2020 101x
Yield 2020 -
Capitalization 1 590 B 1 590 B -
EV / Sales 2020 4,17x
EV / Sales 2021 3,47x
Nbr of Employees 798 000
Free-Float 81,3%
Duration : Period :
Amazon.com, Inc. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends AMAZON.COM, INC.
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 53
Average target price 3 698,93 $
Last Close Price 3 174,05 $
Spread / Highest target 32,3%
Spread / Average Target 16,5%
Spread / Lowest Target -14,0%
EPS Revisions
Jeffrey P. Bezos Chairman, President & Chief Executive Officer
Dave Clark Senior Vice President-Worldwide Operations
Brian T. Olsavsky Chief Financial Officer & Senior Vice President
Patricia Q. Stonesifer Independent Director
Thomas O. Ryder Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
AMAZON.COM, INC.71.77%1 589 849
JD.COM, INC.116.01%116 523
WAYFAIR INC.232.79%28 020
ETSY, INC.179.21%14 114
MONOTARO CO., LTD.76.87%12 158