Source: Ford Ready to Link Up with Alibaba for Online Auto Sales

Ford Motor Co expects to sign a deal by Thursday with Chinese e-commerce behemoth Alibaba Group Holding that might allow the automaker based in the U.S. to test selling its vehicles to clients in China via the online retail platform of Alibaba’s known as Tmall, and through a new store concept know as auto vending machine, said sources at Ford.

Ford and Alibaba representatives, including Bill Ford Jr. the Executive Chairman and Jim Hackett the CEO at Ford, are expected Thursday in Hangzhou to sign the letter of intent for the deal that outlines the new partnership’s scope.

The source, who requested anonymity due to not being authorized to speak to the media, said the deal would position Ford for a growing marketplace in China where more vehicles could be sold through the Internet.

This new partnership would be just one part of the effort by Ford to overhaul its strategy for China to revive growth momentum that it lost over recent months.

Ford’s global top spokesperson said the automaker was expecting to make its announcement Thursday in Hangzhou, the headquarters of Alibaba, but did not want to make any comment prior to the announcement.

A spokeswoman for Alibaba declined to make a comment.

The Ford source said this new proposal would mean that vehicles bought online are then delivered to the buyer by a franchised Ford store and would have maintenance and any repairs done by them.

However, Ford could use the new retail concept on Tmall known as Automotive Vending Machine that is a parking garage of many levels, which resembles in some ways a huge vending machine, to sell to consumer directly.

Those cars would come from Ford or from one of its dealers but those details are not yet worked out, added the source.

Alibaba said consumers are able to user their phones to look through the vehicles that are in the store and then choose to buy one immediately or take it for a test drive. The vehicles would then be delivered to them on the vending machine’s ground floor.

This model allows the shopper who has good credit to purchase a vehicle with a down payment of 10% and then pay monthly for the vehicle through Alipay an affiliate of Alibaba.

Ford believes that dealers would be in agreement with this model of direct retailing because they still can service cars sold using Tmall, said the Ford source.