Ford and Alibaba sign letter of intentFord Motor Company has signed a letter of intent with Chinese e-commerce giant Alibaba to explore strategic collaborations in connectivity, cloud computing, artificial intelligence, mobility services and digital marketing.

Under the three-year agreement, the two companies will explore new ways to define how consumers purchase and own vehicles, as well as how to leverage digital channels to identify new retail opportunities.

In the initial phase, Ford and Alibaba will explore a pilot study on digital solutions for new retail opportunities at various stages of the automotive ownership cycle, from pre-sales and test drives to leasing options.

Ford will cooperate with Alibaba’s four business units in operation system, cloud computing, digital marketing and online retail respectively – namely AliOS, Alibaba Cloud, Alimama and Tmall.

Jim Hackett, Ford’s CEO, and Daniel Zhang, Alibaba Group CEO, both attended the event at Alibaba’s headquarters in Hangzhou where the letter of intent was signed.

Alibaba’s Zhang said: “Our data-driven technology and platform will expand the definition of car ownership beyond just having a mode of transportation and into a new medium for smart lifestyle.”

Hackett said: “China is one of the world’s largest and most dynamic digital markets, thriving on innovation with customers’ online and offline experiences converging rapidly. Collaborating with leading technology players builds on our vision for smart vehicles in a smart world to reimagine and revolutionise consumers’ mobility experiences.”

The news comes days after Ford announced plans to grow its China revenue by 50% by 2025. It plans to introduce more than 50 new vehicles in the country by then, including eight all-new SUVs and at least 15 electrified vehicles. The Zotye-Ford JV also plans to launch a range of affordable electric vehicles.

Amazon has also made steps into the car retail business, first selling Fiat vehicles on its Italian website and then also planning a broader online vehicle sales strategy for Europe.

Meanwhile, Polestar and Lynk & Co brands, both housed within Geely’s Volvo subsidiary, have also announced plans for subscription-type ownership models and direct rather than dealership-based communication with customers.