Ford collaborates with Alibaba as it expands into China

Alibaba, Ford Partner to Redefine the Driving Experience
US giant Ford mulls 'car ATM' in China

09 December, 2017

However, within this, the two companies also mentioned that they would be exploring new retail opportunities - something that is likely to see Ford begin selling its vehicles through the online sphere of Alibaba.

Ford is expected to sign a deal with China's Alibaba Group that may allow the carmaker to test selling cars to Chinese consumers via Alibaba's online retail arm Tmall, formerly known as Taobao Mall.

Ford CEO Jim Hackett and Alibaba Group CEO Daniel Zhang were on hand for the signing of the Letter of Intent between their respective companies. Those cars could come directly from Ford or from its dealers but the details are still to be worked out, the source added.

Alibaba says that consumers can use their phones to browse the cars in the garage, before choosing to either test drive it or buy immediately. Ford's sales volume in China has been moving at a slow pace in the recent months as they struggle to keep up with the rapidly changing trends on the market including the increasing demand for entry-level vehicles, especially in small towns and cities.

Alibaba has previously said a score above 750 through its own credit scoring model called Sesame - can purchase the vehicle with a 10% down payment and a commitment to monthly payments through Alipay, according to Reuters.

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China is not only the largest auto market in the world, executive chairman Bill Ford pointed out, but is also "at the heart of electric-vehicle and SUV growth and the mobility movement".

The move, though, could be potentially problematic for dealers, some industry experts said. "But if this format gained steam, it would definitely impact dealers", according to Yale Zhang, head of Shanghai-based consultancy Automotive Foresight.

"The scope of alliance is fairly broad and vague at this point, but a large chunk of the" strategic collaboration" appears to be based around developing a direct sales channel to reach consumers in China. As of October, Ford's 2017 auto sales were down 5% from the same period in 2016.

Online vehicle sales volumes are now small in China because buyers want to be able to see, touch and drive cars before buying, Zhang pointed out.

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