Chinese to buy cars online through Alibaba platform
Chinese to buy cars online through Alibaba platform
Representatives of Ford and Alibaba, including Ford Executive Chairman Bill Ford Jr. and Ford CEO Jim Hackett, are expected to be in Hangzhou on Thursday to sign a letter of intent that outlines the scope of the new partnership.
According to the source, who did not want to be named because he is not authorized to speak with reporters, the deal is intended to position the Dearborn, Michigan, automaker for an emerging Chinese marketplace where more cars could be sold online.
The partnership would be part of Ford’s effort to overhaul its China strategy to revive the growth momentum it has lost in recent months.
Ford’s global chief spokesman Mark Truby said the company is expected to make an announcement on Thursday in Hangzhou, where Alibaba is based, but declined to comment in advance.
Alibaba spokeswoman Crystal Liu declined to comment.
The source said the proposal could mean that cars purchased online are delivered to buyers by franchised Ford retail stores and would be maintained and repaired by them.
But Ford could also use Tmall’s new retail concept called the “Automotive Vending Machine” — a multi-story parking garage that partly resembles a giant vending machine — to sell directly to consumers, the source said. Those cars could come directly from Ford or from its dealers but the details are still to be worked out, the source added.
According to Alibaba, consumers can use their phones to browse through the cars garaged in the store and choose to either immediately buy one or test drive it. The vehicle would be delivered to them on the ground floor.
The model allows shoppers with good credit to purchase their new ride with a 10 percent down payment and then make monthly payments for the car purchase through Alibaba’s affiliate Alipay, according to Alibaba.
Ford believes dealers would likely agree to this direct retailing model because they 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.
“When online sales and direct sales volume was small that’s one thing. 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 it is by its nature disruptive and can’t keep everybody happy.”
The danger is that the dealers lose out not only on a lot of car sales but also the potentially lucrative auto financing aspect of their traditional business.
Direct selling by auto brands is not always possible in many markets around the world. In the US, for example, because of franchise auto dealer operators’ political clout, except for a small number of states, direct selling is largely not possible.
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 currently limited in China because car buyers want to be able to see, touch and drive cars before buying them, said Zhang. The ability to test drive a car ordered online could change that.
Ford’s China sales have been sluggish in recent months in part because it has failed to catch on to rapidly changing trends in the marketplace, including the rise of entry-level cars popular in smaller and less-well-known cities, where demand is booming.
Ford’s sales in the first 10 months of this year were 938,570, a decline of 5 percent from the same period in 2016, against a 2.2 percent gain to 3.13 million for hometown rival General Motors.
SoftBank’s Son says Japan is ‘stupid’ to disallow ride-sharing
- ‘Ride-sharing is prohibited by law in Japan. I can’t believe there is still such a stupid country’
- SoftBank and its nearly $100 billion Vision Fund have invested in ride-sharing firms Uber, Didi, Ola and Grab, as well as in other technology companies
TOKYO: SoftBank Group Corp. Chief Executive Masayoshi Son blasted Japan on Thursday for not allowing ride-sharing services, calling it “stupid” and saying the country was lagging overseas rivals in areas such as artificial intelligence (AI).
“Ride-sharing is prohibited by law in Japan. I can’t believe there is still such a stupid country,” Son said at an annual company event aimed at customers and suppliers.
The comments reflect Son’s frustration with Japan where he built SoftBank’s domestic telecoms business, the cash engine that has powered his investments. The group has, however, focused its growing range of technology investments overseas.
Son has also been highly critical of the government previously when SoftBank was still a fledgling telecoms service trying to break up a cozy duopoly in Japan.
“A country that gives up on the future has no future,” Son told attendees at the SoftBank World event, saying Japanese business is lagging behind countries such as the United States and China in employing AI.
Japan outlaws non-professional drivers from transporting paying customers on safety grounds and the country’s taxi industry lobby has vigorously opposed deregulation.
Its strict rules have confined ride-sharing firms to providing limited services, with SoftBank and China’s Didi Chuxing saying on Thursday they will trial a taxi-hailing service — matching users to pre-existing taxi operators — in Osaka beginning autumn of 2019. Uber is also piloting a taxi-hailing service.
When asked for a response to Son’s comments, a spokesman for the Ministry of Land, Infrastructure, and Transport said that an issue with ride-sharing services was that while the driver was in charge of transporting passengers, it was unclear who was in charge of maintenance and operation.
“The ministry believes that offering these services for a fee poses problems from the points of both safety and user protection, and careful consideration is necessary,” he said.
Ride-sharing is not the only service in Japan feeling the impact of government restrictions. Strict new rules on home-sharing came into force last month that have radically reduced the number of lettings on sites such as Airbnb Inc.
The curbs on Japan’s nascent sharing economy come despite a rapid rise in the number of inbound tourists likely to access such sharing services, and at a time when Japan is wanting to show its international face ahead of hosting the Rugby World Cup next year and the Summer Olympics in 2020.
While Son, an ethnic Korean born in Japan, has at times criticized the Japanese government, he can also be politically suave. He has praised US President Donald Trump with warm words and pledged to invest billions of dollars and create thousands of jobs in the United States.
SoftBank and its nearly $100 billion Vision Fund have invested in ride-sharing firms Uber Technologies Inc, Didi, India’s Ola and Southeast Asia’s Grab, as well as in other technology companies.
The event on Thursday saw presentations from executives at portfolio companies including Didi, General Motors’ autonomous vehicle unit Cruise and India digital payments firm Paytm E-Commerce Pvt Ltd.
Artificial intelligence is the common thread linking these companies, Son said, with that technology in the future able drive vehicles, diagnose diseases and power financial services.