Under the agreement, Ford will be working with four of Alibaba's business units-operating-system developer AliOS, cloud-computing platform Alibaba Cloud, digital-marketing arm Alimama and B2C shopping site Tmall-to identify opportunities in these areas as well as artificial intelligence, infotainment and the Internet-of-Things (IoT).
However, within this, the two companies also mentioned that they would be exploring new retail opportunities - something that is likely to see Ford begin selling its vehicles through the online sphere of Alibaba.
The new partnership was signed in a letter of intent between Hackett and Daniel Zhang, President and CEO of the Alibaba Group, at the Chinese firm's headquarters in Hangzhou. Those cars could come directly from Ford or its dealers, with details still to be worked out, the unnamed source added.
Ford has put a lot of focus on China's electric vehicle market - with a local joint venture expected to lead to 15 electric or hybrid models on sale in the country by 2025 - and today the automotive giant announced a tie-in with Alibaba to fulfill its ambitious goals. The vehicle would then be delivered to the ground floor automatically.
"The scope of alliance is fairly broad and vague at this point, but a large chunk of the" strategic collaboration" appears to be based around developing a direct sales channel to reach consumers in China.
Speaking to Reuters, head of Shanghai-based consultancy Automotive Foresight, Yale Zhang, said it will hurt traditional dealers. "Retail innovation is great, but is by its nature disruptive and can't keep everyone happy". In the United States, for example, because of franchise auto dealer operators' political clout, except for a small number of states, direct selling is largely not possible.
Ford's Chinese 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.
Online auto sales volumes are now limited in China because vehicle buyers want to be able to see, touch and drive cars before buying them, said Zhang.