Car Industry

Ford, Alibaba to test online sales, car vending machine concept?

Ford signs strategic agreement with tech juggernaut Alibaba to investigate new retailing opportunities in China.

Solo Imaji / Barcroft Media / Barcroft Media via Getty Images

Ford and Chinese tech juggernaut Alibaba have signed a comprehensive deal to explore new ways of selling cars in China. 

The plan calls for exploring test-selling automobiles both online and at physical locations, Reuters reports. The multipronged "letter of intent" means that Ford and Alibaba will jointly explore opportunities around cloud computing, artificial intelligence, mobility services, digital marketing, and online retailing for at least three years.

According to Reuters, Ford will investigate leveraging Alibaba's Tmall online store to sell new vehicles, as well as its new "'auto vending machine' store concept," an idea that sounds more than a bit like what used car retailer Carvana has pioneered with increasing success. 

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. Eligible customers will be able to put 10 percent down on their new vehicles and finance the rest through Alibaba's Alipay.

Ford and Alibaba execs have signed an agreement to jointly explore new ways to sell cars and services in China.

Ford

Vehicles purchased online through Alibaba's Tmall may be delivered and serviced through Ford dealers, and indeed, the same could apply to vehicles found in the company's vending machine buildings.  

Ford will likely have to work hard to assuage any concerns of its dealer body with any Alibaba deal, as their existing network of retailers could grow concerned that they're being cut out of new vehicle sales and financing opportunities. Direct sales from automaker to consumer are possible in China and other global markets, but the practice is generally illegal in most US states. 

When Roadshow reached Alibaba and Ford reps by phone, neither immediately offered a comment on this story.

Update, Dec. 7: This story has been updated to reflect the signing of the letter of intent, along with new details about the agreement's areas of focus.