Will Auto Sales Define the Next Amazon-Walmart Contest?

It seems as if consumers can buy just about anything from Amazon. Now, you can add cars to that list.

Can Amazon Autos become a go-to destination for car buyers, providing Amazon with a competitive edge in an area where Walmart has yet to establish a strong presence?

While Walmart does sell and even buy cars through its Carsaver partnership, the company still relies on third parties to handle the bulk of the transaction process. This leaves an opportunity for Amazon to take a more direct approach, leveraging its vast ecosystem and tech-driven conveniences to elevate the car-buying experience.

In an interview with PYMNTS, Michael Zakkour, Founder and Chief Strategist at 5 New Digital, explained that Amazon is trying to live up to its reputation as “The Everything Store” by creating Amazon Autos.

“Amazon is banking on consumers’ familiarity and trust in the Amazon platform and seeing all of its features, like reviews and star ratings, applied to the car-buying process,” Zakkour noted. “It was strategically wise for Amazon to start with an exclusive partnership with Hyundai. This partnership gives Amazon a chance to learn about the auto industry, collect reams of data and better formulate how to disrupt the category and make online buying a significant purchase channel for cars.”

Unlike Walmart’s Carsaver platform, which primarily serves as a middleman for car sales and does not provide the same end-to-end experience, Amazon’s direct entry into the market gives it an opportunity to redefine the online car-buying journey. Walmart’s approach involves facilitating sales through a third party, but Amazon’s ecosystem will integrate car-buying into its core platform, offering everything from purchasing and financing to delivery with the added benefits of Prime perks and Alexa integration.

While the number of “100% pure, sight-unseen online car purchases is growing, they still pale in comparison to dealership sales,” he added. “CarMax, Carvana and Vroom have made solid progress in the used car and B2B car sales spaces, while still not finding a mass audience for new car sales. I expect Amazon to deploy their usual playbook when entering a new category. That said, Amazon still has a lot of challenge to overcome, much as they found out with their purchase of Whole Foods and the rollout of Amazon Fresh stores in grocery.”

Amazon’s entry into the used car market leverages its financial strength, advanced technology, and ecosystem synergies to gain a competitive edge over weaker rivals like Carvana and Vroom, Zakkour noted. By undercutting prices, simplifying the purchasing and delivery process and bundling cars with Prime perks and Alexa integrations, Amazon can offer unmatched convenience and value. Additionally, its strong brand reputation for customer service and reliability positions it to attract hesitant online car buyers and dominate the market.

But, Zakkour added, “many buyers still prefer test drives and in-person experiences before purchasing a car. Amazon must address this with test-drive partnerships or similar solutions.”

“Trusting an entirely online process for such a high-ticket purchase may take time. Cars are unlike books or electronics. They require specialized logistics for delivery, inspection, and registration. Managing returns or exchanges adds to this complexity.”

With the brand power Amazon commands, it can challenge traditional auto sales and provide a more streamlined experience than what Walmart’s Carsaver platform offers. Combining consumer trust with technological innovation could give Amazon an edge in attracting a broader audience to its car-buying service, Zakkour added, setting it apart from Walmart’s current indirect approach.

But Amazon will face competition on two fronts, Zakkour explained, adding, “Carvana and Vroom, though weaker financially, have existing infrastructure for online car sales. Automakers and dealerships invest heavily in improving their online capabilities. Amazon has disrupted and remade entire consumer product and service categories before, and I give them a fighter’s chance to do it again in online auto sales.”

Meanwhile, consumer confidence could be a big advantage for Amazon, according to Arias Websterberry, CEO of WebsterBerry Marketing.

“Amazon already has millions of users who associate the brand with convenience and reliability,” he explained to PYMNTS. “With the Amazon app, it’s incredibly easy to find competitive pricing, which gives them a strong edge in building consumer confidence as they expand into this new industry and offering.”

Amazon’s logistics and delivery expertise, Websterberry added, is one of its biggest strengths. “They’ve completely revolutionized the global logistics system and are unmatched in getting products directly to consumers,” he said. “I’m really curious to see how they’ll streamline the delivery process for something as large and complex as a car. It will be fascinating to see how Amazon integrates this offering with their other services, like Prime and Alexa. Imagine scheduling a test drive through the Amazon app or even asking Alexa to remind you about car maintenance — it’s those kinds of integrations that could set them apart.”

Amazon’s scale and “deep pockets give it clear advantages as it moves into online auto sales,” according to Nelson Pereira, Managing Partner, Transportation & Mobility at digital consultancy Publicis Sapient. “But cars aren’t like gadgets. A lot of buyers still want to kick the tires — literally — take a test drive, and yes, even negotiate in person. Add in trade-ins, after-sales service and warranty support, and it’s clear Amazon will have some gaps to fill.”

This move will push the industry forward by better connecting with digital-first consumers, Pereira added, “but it won’t replace what exists today. For OEMs, the real opportunity is finding the right balance — offering the seamlessness, digital-first experience consumers expect while preserving the trust and touchpoints that make the car-buying journey unique. That’s where the future is headed.”

Here’s a look at other notable developments from Amazon and Walmart in the past week:

Amazon Highlights

Amazon Revamps Packaging for Sustainability: Amazon is enhancing its packaging for devices like Echo, Kindle, and Fire TV to improve sustainability and recyclability. The company redesigned its packaging to include 30% more recycled fiber, reduced ink usage by 60%, and removed plastic bags in favor of water-based coatings and paper wraps. The changes are part of Amazon’s plan to reduce its environmental impact, including lowering packaging weight and eliminating plastic air pillows in deliveries. Amazon seeks to make its packaging easier to recycle, improve product accessibility with tactile QR codes, and meet its climate goals by decarbonizing its transportation network.

Amazon Expands Delivery Network to Remote Areas of Mexico: Amazon’s logistics network in Mexico enables reliable delivery even to remote areas like Baja California Sur, a region with limited road access and dispersed communities. The process begins with products being shipped from fulfillment centers to a port, where they are ferried across the Gulf of California before being delivered by third-party carriers using various transport methods. This efficient system has allowed Amazon to expand its reach from 16 cities in 2015 to over 400 cities today, enhancing economic and social integration in underserved regions. Amazon Expands Delivery Network to Remote Areas of Mexico

Walmart Highlights

Walmart’s Fintech One to Raise $300 Million, Expand Services: Walmart’s FinTech arm, One, is set to raise $300 million through Ribbit Capital in 2025, with plans to relaunch its credit card offering after parting ways with Capital One. This funding will support the company’s expanding financial services portfolio, which now includes checking accounts, buy now, pay later (BNPL), and upcoming pay-by-bank features. With a customer base of 255 million, including many underbanked individuals, Walmart is leveraging its vast consumer data to offer integrated banking and payment solutions, creating opportunities for cross-selling and strengthening customer loyalty.

Walmart Tests Body Cameras for Employees: Walmart launched a pilot program in some U.S. stores, equipping employees with body cameras to enhance worker safety and deter conflict. The cameras, which have been used widely in law enforcement, are being tested to help address escalating interactions with customers, particularly during the busy holiday season. While similar technologies have been used by smaller retailers for theft prevention, Walmart’s focus is on protecting employees rather than loss prevention. Signs notifying shoppers of the cameras’ presence have been spotted in some locations and company officials plan to evaluate the program before making any long-term decisions.