Automaker Ford Motor Co is expected to sign an agreement with Alibaba Group Holding Ltd that will make it possible for the U.S Company to test its cars to customers in China using Alibaba’s online retail arm Tmall. This was revealed by a source that is close to Ford.
During the event, representatives of Ford and Alibaba including Chairman of Ford Bill Ford Jr. and CEO Jim Hackett will be in Hangzhou on Thursday to sign the deal. The deal will first be a letter of intent that showcases the scope of the partnership between the two companies.
The source further added that the deal is intended to make Ford a leader in the emerging Chinese marketplace that will see more cars sold online. The partnership is also part of the overhaul plans being put in place by Ford as it aims to revive its declining sales growth in China.
The global spokesman for the company Mark Truby stated that Ford will make the announcement later today in Hangzhou, the city where Alibaba is based. The spokeswoman of Alibaba Crystal Liu declined to comment on the issues.
The source added that the partnership would see vehicles purchased online are delivered to customers by franchised Ford retail stores with the stores also responsible for maintaining and repairing them.
The source however mentioned that Ford could also use Tmall’s new retail concept, the “Automotive Vending Machine.” The concept could be used to sell vehicles directly to their customers. The sold cars could either be supplied directly from Ford or from its dealers, at this point nothing is certain as the details will be worked out later.
Alibaba in its statement mentioned that consumers could use their smartphones to browse through the cars available in their store. The customer can decide to purchase a vehicle immediately or test drive it. The company further added that the car would be delivered to the customer on the ground floor.
The model would make it possible for shoppers that have good credit to acquire new vehicles by just making a 10% down payment, and then following it up with monthly payments for the car purchase using Alibaba’s affiliate Alipay.
Ford is hopeful that customers would agree to this form of retailing that will also allow them to service their cars through Tmall.