Amazon Makes a Move on U.K. Car WebsitesBy and
U.S. retailer plans to sell cars in U.K., magazine reports
European expansion would follow limited market run in Italy
Europe’s online car market is about to get more crowded, with a plan by Amazon.com Inc. to sell vehicles in the U.K. unnerving shareholders of the region’s biggest auto websites.
Britain’s Auto Trader Group Plc fell to a two-month low following a report that Amazon plans to expand its cars offering in Europe beyond a current test run in Italy. The U.S. retailing giant, which already sells vehicles in its home market, is seeking to fill a gap as traditional dealerships lose appeal.
Tech companies from Apple Inc. to Alphabet Inc. are upending established industry structures as almost every aspect of making, driving and buying cars changes. Seattle-based Amazon, which has been testing European waters with a limited offer of Fiat Chrysler Automobiles NV models in Italy, is now in talks to start sales in the U.K. before potentially adding other countries, German trade magazine Automobilwoche reported.
Manufacturers, which typically sell autos through affiliated dealers, are responding to changing habits by allowing customers to configure cars online. BMW AG is testing online-only sales in some markets, and Mercedes-Benz and Jaguar Land Rover have opened urban brand stores complete with restaurants and juice bars.
While Auto Trader’s market position in the U.K. is “very, very strong,” anytime newcomers such as Alphabet’s Google or Amazon show interest, “it’s enough to unsettle investors,” said Paul Richards, a London-based analyst at Numis Securities.
The Manchester, England-based online sales platform, which gets almost all of its revenue from the U.K., dropped as much as 5.8 percent to 395.60 pence in London trading, making it the worst performer on the FTSE 350 Media Index. That was the lowest intraday price since April 19. German competitor Scout24 AG slumped 5.4 percent, the most in 11 weeks.
A spokesman for Amazon declined to comment on European plans and it’s not clear whether new or used cars will be offered. The company last year announced a deal to sell three Fiat subcompacts, including the 500 and Panda, on its Italian website. The program was extended in March and now also includes long-term leases.