Dealers Frustrated With Amazon, Rivian Pre-Owned, Kirkland Towers

The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

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With only 6 days left in the month, we’re cruising into Wednesday. Today, we’ve got an update on the Hyundai-Amazon partnership and how dealers are feeling about it. Plus, we’re talking about Rivian’s new pre-owned program and a new Costco that is stacking apartments on top of its warehouse.

Show Notes with links:

• Hyundai’s ambitious plans to sell vehicles through Amazon are testing dealer patience, as the initiative is still in its pilot phase after being announced a year ago. During the Automotive News Congress, industry leaders voiced their concerns about the partnership and its broader implications for dealerships.
  • NADA CEO Mike Stanton noted the frustration, calling the platform "just another digital retail tool" rather than a top-tier solution.
  • NADA is collaborating with Hyundai and Amazon lawyers to ensure the partnership complies with state franchise laws, as Amazon's goal for a seamless customer experience is proving more complex than anticipated, especially in financing and trades.
  • Inga Maurer from McKinsey warned of risks, cautioning dealers about the potential loss of customer data, which Amazon could leverage for marketing other products like parts.
  • Eddie Hall III of Hall Automotive acknowledged that Amazon could become an additional sales channel but emphasized that in-person dealership visits remain crucial.
  • Stanton questioned whether customers would make significant purchases like cars on Amazon, saying, "I don't think I am going to go over and buy a car after I buy my toothpaste."

• Rivian Automotive is diving into the pre-owned vehicle market with its R1T pickup and R1S crossover, aiming to create new revenue streams as new vehicle deliveries slow in the U.S. This move marks a pivotal step as the EV maker matures in a competitive industry.
  • Sales of new R1 vehicles have stalled, with registrations dropping 0.3% in July.
  • Pre-owned EVs are attractive due to significant depreciation on new models, making them a bargain.
  • Rivian posted a net loss of $1.5 billion in Q2 but expects increased demand for used EVs due to price drops across the market.
  • Analyst Ivan Drury of Edmunds praised the program, saying it builds consumer confidence and is "almost mandatory" for brand legitimacy.

• Costco has officially started construction on its first-ever mixed-use development in South Los Angeles, combining a warehouse with 800 residential units above it. The project aims to tackle LA’s housing crisis while providing essential retail services.
  • Located in Baldwin Village, the Costco will feature typical services like a pharmacy, optical care, and grocery delivery and will create 400 jobs.
  • 23% of the units are designated for low-income households, and developer Thrive Living is using modular design to keep housing costs low, with amenities such as urban gardens, secure parking, and a rooftop pool.

Hosts: Paul J Daly and Kyle Mountsier
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