Geely Automobile Holdings has become the first automaker to launch a flagship store on Taobao Mall, Alibaba Group’s B2C website for major brands. Starting Dec. 22, Chinese consumers will be able to initiate online purchases of a model from Geely’s Gleagle line of inexpensive, mass-market sedans.
Auto companies all over the world are experimenting with e-commerce as an alternative to selling cars through dealerships, which requires large, expensive inventories (and often money losing discounts to move cars when sales estimates go awry). Last month Kia, South Korea’s second-largest car company, became the latest to stick a toe in web waters when it announced some 300 of its U.S. dealers had agreed to start selling via e-Bay. Geely, China’s first non-state-owned carmaker, isn’t breaking much ground by opening an online store. The Chinese company currently plans to offer just one model on Taobao Mall: the Gleagle Panda, a compact four-door selling for under $6,000. Not only is selection limited, the purchasing process is just barely digital. Buyers make a small deposit online before going to a nearby dealership for a test drive, where sales are completed. Geely is not delivering cars to buyers’ homes, either, although the company says that could be possible in the future.
It’s a start. The company has plans to gradually expand online sales to other models, including some that will be available only via the Taobao Mall store. No word on what those cars might be, but e-commerce appears to be more promising at the low end of the auto market. In September, Mercedes-Benz held a flash sale of its tiny Smart cars on Taobao, selling 205 of them in less than four hours at a discount of 24 percent off the sticker price. Geely, which is headquartered in Hangzhou in China and is best known for buying Volvo from Ford, announced plans last spring to bring out the Gleagle IG microcar in 2012. With an estimated sticker price of $2,250, the Gleagle IG would be even cheaper than India’s Tata Nano. Oh, and since you are wondering, the name “Gleagle” is apparently a Chinese contraction for “global eagle.” Geely sells quite a few cars in emerging markets such as Africa.