Alibaba and Ford form technology-based alliance

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The cars would then be maintained and repaired by these franchise locations.

"The multi-pronged "letter of intent" 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.

Alibaba says that consumers can use their phones to browse the cars in the garage, before choosing to either test drive it or buy immediately.

The cars could come directly from Ford or from its dealer network - the details are still being worked out, Reuters reported.

Back to Fords on Tmall, the model allows shoppers with good credit to purchase a vehicle with a 10% downpayment, and then make monthly payments via Alibaba's Alipay.

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 model allows shoppers with good credit to purchase their new ride with a 10 per cent down payment and then make monthly payments for the vehicle purchase through Alibaba's affiliate Alipay, according to Alibaba.

The move, though, could be potentially problematic for dealers, some industry experts said.

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.

"When online sales and direct sales volume was small that is one thing. But if this format gains steam, it would definitely impact dealers", said Yale Zhang, the head of Shanghai consultancy Automotive Foresight. However, Alibaba gets both the financing and the sales. According to Reuters, this deal is part of Ford's plans to change up its sales strategy in China. The direct sales model couldn't work in the USA due to a strong auto dealer network with a decent amount of political power.

Ford's China sales have been sluggish in recent months as it struggles to keep pace with rapidly changing trends, including increased demand for entry-level cars in smaller cities.

Ford's sales in the first 10 months of 2017 were 938,570, a decline of 5% from the same period in 2016, against a 2.2% gain to 3.13-million for rival General Motors.