Ford Inks Alibaba Deal To Push Mobile Strategy

Ford has been lagging behind competitors in emerging technologies for automobiles, including the race for driverless cars.

Ford and Chinese ecommerce/technology company Alibaba have signed a letter of intent to jointly explore areas of cooperation in connectivity, Cloud computing, artificial intelligence, mobility services and digital marketing.

Under the three-year agreement, the companies will look for partnership opportunities in areas that are reshaping the automotive industry in China and around the world—exploring new ways to redefine how consumers purchase and own vehicles, as well as how to leverage digital channels to identify new retail opportunities. Ford will cooperate with Alibaba’s four business units in operating systems, Cloud computing, digital marketing and online retail—namely AliOS, Alibaba Cloud, Alimama and Tmall.

Ford has been lagging behind competitors in emerging technologies for automobiles, including the race for driverless cars, but its appointment of Jim Hackett as CEO last May marked a change in strategy.

Hackett was named by Ford in 2016 to head up its Ford Smart Mobility subsidiary, which includes autonomous vehicles (AVs) and connectivity features. The strategic collaboration with Alibaba fits with Ford’s recent strategic update to focus on both electric vehicles and smart mobility.

While Ford has not provided much detail on anything it is doing in the AV space, it is clear the company wants to do more than ride hailing. Ford may develop AVs for various business-to-consumer and perhaps B2B services, says David Whiston, automotive equity analyst at Morningstar Research Services: “Exactly how is still a bit of a mystery to everyone. It’s likely in some respects to be similar to GM’s recently announced Marketplace ecommerce suite, but it’s hard to say exactly how.”

While a push into the Chinese market will greatly benefit Ford, the collaboration promises to be more than just a marketing alliance, says Whiston: “I think they want consumers in a Ford AV to be able to order many things from Alibaba, and ultimately that can be integrated into the AV in many ways, such as a touch screen and also voice. From there you can take consumer data across Alibaba’s various holdings. It’s all experimental for now but has lots of potential for the future.”