Ford partners with Alibaba Group in China

Marco Green
December 8, 2017

One avenue under consideration is the sale of Ford cars on Tmall, an Alibaba spokeswoman said.

Hoping the spread of NEVs can help ease pressure on the environment, the Chinese government has introduced a slew of measures, including offering tax exemptions and subsidies for auto purchases, and ordering government organizations to buy more new energy cars. Alibaba is often referred to as China's Amazon. The cars would then be maintained and repaired by these franchise locations.

The cars could come directly from Ford or from its dealer network - the details are still being worked out, Reuters reported. Consumers could use the vending machine with an app, choosing to either immediately buy one of the vehicles or test drive one. The vehicle would be delivered to them on the ground floor.

Ford believed dealers were likely to agree to this direct retailing model because they would still get to service cars sold through Tmall, the Ford source said.

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. "Retail innovation is great, but is by its nature disruptive and can't keep everyone happy".

Should Ford choose to provide the cars directly to Alibaba, the deal could anger dealers who are losing out both on potential vehicle sales as well as the financing behind it.

Direct selling by automotive brands is not always possible in many markets around the world. The direct sales model couldn't work in the US due to a strong auto dealer network with a decent amount of political power.

The Alibaba partnership is the latest in a series of partnerships and initiatives in recent months in which Ford amplifies its presence in China.

Online auto sales volumes are now limited in China because vehicle buyers want to be able to see, touch and drive cars before buying them, said Zhang.

Ford Motor Co. on Thursday announced another Chinese partnership to expand its footprint in the world's largest auto market.

The company plans to offer more than 50 new Ford and Lincoln vehicles in China by 2025 including eight all-new SUVs and at least 15 new electrified vehicles from Ford and Lincoln.

Other reports by Click Lancashire

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