News of Amazon’s plan to enter the U.K. online auto sales market after a current test run in Italy has unnerved shareholders of Britain’s biggest auto dealer websites.
According to Bloomberg Markets, the news that Amazon might be selling vehicles in the U.K. caused Britain’s Auto Trader Group Plc to fall to a two-month low.
The U.S. retail giant, which already sells vehicles in the states, is seeking to fill a gap as traditional car dealerships lose appeal in today’s shopping climate. The company has been testing the waters with a limited offer of Fiat Chrysler Automobiles NV models in Italy and is now in talks to start sales in the U.K. before potentially adding other countries.
Tech companies from Apple, Inc. to Alphabet, Inc. are also working to change established structures as the automobile industry changes. In addition, manufacturers are allowing customers to configure cars online. BMW AG is testing online-only car sales in some markets, and Mercedes-Benz and Jaguar Land Rover have opened urban brand stores that even feature restaurants and juice bars.
While Auto Trader’s market position in the U.K. is “very, very strong,” anytime newcomers show interest, “it’s enough to unsettle investors,” said Paul Richards, a London-based analyst at Numis Securities.
The Manchester-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.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More