Ford (NYSE: F) announced plans to sign a deal with Alibaba Group Holding Ltd. (NYSE: BABA) this week that may allow them to test selling cars to consumers in China through Alibaba’s online retail arm, Tmall. A new “auto vending machine” store concept will also be used to help Ford test this new idea. This partnership is aimed to position Ford in the emerging Chinese marketplace where more vehicles could be sold online and efforts to revive the growth in sales that had been lost recently.
Vehicles that are bought online are to be delivered to buyers by franchised Ford retail stores and repaired and maintained by them as well. Tmall’s “Automotive Vending Machine” is a parking garage that somewhat resembles a giant vending machine to be sold directly to consumers. These vehicles could come directly from the automaker or from dealers. Final details are to be worked out soon in the proposal looking to be signed by the end of this week.
According to USA Today, HIS Markit analyst Namrita Chow said, “Ford’s new strategy highlights the importance of China in the company’s growth plans.” “Its new strategy to significantly ramp up its deliverables to the local consumer base in China comes at a much needed point for the automaker in China.”