BEIJING: Ford Motor is expected to sign as early as Thursday a deal with Alibaba Group Holding which may allow the US automaker to test selling cars to consumers in China through Alibaba’s online retail arm Tmall, as well as via a new “auto vending machine” store concept, according to a Ford source familiar with the matter.
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.
Chinese to buy cars online through Alibaba platform
Chinese to buy cars online through Alibaba platform
Saudi investment pipeline active as reforms advance, says Pakistan minister
ALULA: Pakistan’s Finance Minister Mohammed Aurangzeb described Saudi Arabia as a “longstanding partner” and emphasized the importance of sustainable, mutually beneficial cooperation, particularly in key economic sectors.
Speaking to Arab News on the sidelines of the AlUla Conference for Emerging Market Economies, Aurangzeb said the relationship between Pakistan and Saudi Arabia remains resilient despite global geopolitical tensions.
“The Kingdom has been a longstanding partner of Pakistan for the longest time, and we are very grateful for how we have been supported through thick and thin, through rough patches and, even now that we have achieved macroeconomic stability, I think we are now well positioned for growth.”
Aurangzeb said the partnership has facilitated investment across several sectors, including minerals and mining, information technology, agriculture, and tourism. He cited an active pipeline of Saudi investments, including Wafi’s entry into Pakistan’s downstream oil and gas sector.
“The Kingdom has been very public about their appetite for the country, and the sectors are minerals and mining, IT, agriculture, tourism; and there are already investments which have come in. For example, Wafi came in (in terms of downstream oil and gas stations). There’s a very active pipeline.”
He said private sector activity is driving growth in these areas, while government-to-government cooperation is focused mainly on infrastructure development.
Acknowledging longstanding investor concerns related to bureaucracy and delays, Aurangzeb said Pakistan has made progress over the past two years through structural reforms and fiscal discipline, alongside efforts to improve the business environment.
“The last two years we have worked very hard in terms of structural reforms, in terms of what I call getting the basic hygiene right, in terms of the fiscal situation, the current economic situation (…) in terms of all those areas of getting the basic hygiene in a good place.”
Aurangzeb highlighted mining and refining as key areas of engagement, including discussions around the Reko Diq project, while stressing that talks with Saudi investors extend beyond individual ventures.
“From my perspective, it’s not just about one mine, the discussions will continue with the Saudi investors on a number of these areas.”
He also pointed to growing cooperation in the IT sector, particularly in artificial intelligence, noting that several Pakistani tech firms are already in discussions with Saudi counterparts or have established offices in the Kingdom.
Referring to recent talks with Saudi Minister of Economy and Planning Faisal Alibrahim, Aurangzeb said Pakistan’s large freelance workforce presents opportunities for deeper collaboration, provided skills development keeps pace with demand.
“I was just with (Saudi) minister of economy and planning, and he was specifically referring to the Pakistani tech talent, and he is absolutely right. We have the third-largest freelancer population in the world, and what we need to do is to ensure that we upscale, rescale, upgrade them.”
Aurangzeb also cited opportunities to benefit from Saudi Arabia’s experience in the energy sector and noted continued cooperation in defense production.
Looking ahead, he said Pakistan aims to recalibrate its relationship with Saudi Arabia toward trade and investment rather than reliance on aid.
“Our prime minister has been very clear that we want to move this entire discussion as we go forward from aid and support to trade and investment.”
