Ford's Deal With Alibaba Leaves OEM's Financial Arm Out of China

Alibaba and Ford form technology-based alliance

Alibaba, Ford Partner to Redefine the Driving Experience

Ford Motor Co. and leading Chinese e-commerce firm Alibaba on Thursday announced a major strategic collaboration in online car-related services, as the US auto giant seeks to revive its flagging sales in the world's largest vehicle market. According to Reuters, this deal is part of Ford's plans to change up its sales strategy in China.

"Now is the time to deepen the partnerships we have with Changan and Jiangling Group and present one Ford brand in China", Fleet said.

But Ford could also use Tmall's new retail concept, called the automotive vending machine - a multistorey parking garage that partly resembles a giant vending machine - to sell directly to consumers, the source said.

Ford President and Chief Executive Officer Jim Hackett in the statement said collaborating with technology firms builds on its vision to make "smart vehicles".

The vending machine will reportedly allow prospective customers to view a store's inventory on their phones, as well as summon them to the ground floor for a test drive or even purchase them outright.

The cars could come directly from Ford or from its dealer network - the details are still being worked out, Reuters reported.

The source said the tie-up could mean that cars purchased online are delivered to buyers by franchised Ford retail stores and would be maintained and repaired by them. "But if this format gained steam, it would definitely impact dealers", according to Yale Zhang, head of Shanghai-based consultancy Automotive Foresight. "Retail innovation is great, but is by its nature disruptive and can't keep everyone happy". Eligible customers will be able to put 10 percent down on their new vehicles and finance the rest through Alibaba's Alipay. In the United States, for example, because of franchise auto dealer operators' political clout, except for a small number of states, direct selling is largely not possible.

Streamlined Business: Ford is strengthening ties with its joint venture partners Changan and Jiangling in 2018, establishing one distribution services division responsible for the marketing, sales and services associated with all Ford vehicles sold in China. Getting a test drive via the internet could change that, though.

"China is not only the largest auto market in the world, it's also at the heart of electric-vehicle and SUV growth and the mobility movement", Ford Motor Executive Chairman Bill Ford said at the Shanghai event.

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