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

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Consumers could use the vending machine with an app, choosing to either immediately buy one of the vehicles or test drive one. The Detroit automaker said Tuesday that the 15 new electric vehicles, part of the 50 new vehicles it is introducing to China's massive market in the next 18 years, will be Lincolns and Fords.

Alibaba Group and Ford Motor have inked an agreement to explore ways to improve consumer retail experiences in the automotive industry, as the USA automaker looks to rev up sales growth in the China market.

Ford CEO Jim Hackett and chairman Bill Ford, Jr., are reportedly preparing to letter of intent with Alibaba.

Alibaba spokeswoman Crystal Liu declined to comment, according to South China Morning Post (SCMP).

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 are being cut out of new vehicle sales and financing opportunities.

In October alone, 77,000 full electric vehicles were manufactured and an equal number of them were sold, up more than 76 percent and 95 percent respectively.

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The source said the proposal could mean that cars bought online are delivered to buyers by franchised Ford retail stores and would be maintained and repaired by them.

Speaking to Reuters, head of Shanghai-based consultancy Automotive Foresight, Yale Zhang, said it will hurt traditional dealers.

"When online sales and direct sales volume was small that's one thing". "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 auto sales as well as the financing behind it. Eligible customers will be able to put 10 percent down on their new vehicles and finance the rest through Alibaba's Alipay.

The source said Ford is "behind in using big data" to monitor sales trends and effectively market its cars and the move to online sales as well as the access to Tmall's massive database of information on consumers would help it to catch up.

Online auto sales volumes are now small in China because buyers want to be able to see, touch and drive cars before buying, Zhang pointed out.

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