According to Reuters, the plan calls for exploring test-selling automobiles both online and at physical locations.
The model allows shoppers with good credit to purchase their new ride with a 10% down payment and then make monthly payments for the vehicle purchase through Alibaba's affiliate Alipay, according to Alibaba.
Additionally, the partnership with Alibaba could lead to the latest 'Automotive Vending Machine' where vehicles are directly sold to consumers.
Mark Truby, Ford's global chief spokesman said the company is expected to make an announcement on Thursday in Hangzhou, where Alibaba is based, but declined to comment in advance.
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. Those cars could come directly from Ford or its dealers, with details still to be worked out, the unnamed source added. The chosen vehicle would be delivered to the ground floor.
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Online vehicle sales volumes were now limited in China because auto buyers wanted to be able to see, touch and drive the available models before buying them, said Zhang. "But if this format gains steam, it would definitely impact dealers", said Yale Zhang, the head of Shanghai consultancy Automotive Foresight.
Vehicles purchased online through Alibaba's Tmall may be delivered and serviced through Ford dealers, and indeed, the same could apply to vehicles found in the company's vending machine buildings. 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 president and CEO, Jim Hackett, explained the move, describing China as "one of the world's largest and most dynamic digital markets, thriving on innovation, with customers' online and offline experiences converging rapidly".
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.
China is the world's largest auto market, with about 23 million vehicles sold in the first 10 months of the year.