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Coming soon to China: luxury cars sold by vending machine

The Financial Times logo The Financial Times 03/08/2017 Louise Lucas in Hong Kong
Selling cars the old-fashioned way: a Chinese vendor inspects the hood of a compact car at an automobile market in northern Beijing: A Chinese vendor inspects the hood of a compact car at an automobile market in northern Beijing, China on Thursday, July 13, 2006. China's passenger car sales growth slowed to 5.8 percent in June from May's 24 percent rise as higher fuel prices deterred consumers from making purchases. Photographer: Natalie Behring/Bloomberg News. © Bloomberg A Chinese vendor inspects the hood of a compact car at an automobile market in northern Beijing, China on Thursday, July 13, 2006. China's passenger car sales growth slowed to 5.8 percent in June from May's 24 percent rise as higher fuel prices deterred consumers from making purchases. Photographer: Natalie Behring/Bloomberg News.

A can of soda, a packet of cigarettes . . . and a spanking new Maserati. China’s Alibaba is upping the stakes in the world of vending machines, promising to make buying a car “as easy as buying a can of Coke”.

The mega vending machine, expected next year, serves as a fresh symbol of China’s consumerism and the global zeitgeist for instant gratification.

Buyers will be able to browse cars on their smartphones, press the buy button, and the car will be disgorged at ground level from a vertical display tower.

Yu Wei, general manager of the automotive division on Alibaba’s Tmall ecommerce platform, said the era of online car shopping had already arrived and the new automotive retail model “will make buying cars as easy as buying a can of Coke”.

Alibaba is spearheading its new retail model across sectors, blending online shopping with physical stores to offer consumers more choices and, crucially, collate ever more data that can be looped back to encourage them to spend more.

It’s like going to a jewellery shop or an Apple store

Gary Hong, Autobahn Motors

However, the company will not be the first to sell cars from a vending machine. Singaporean used-car seller Autobahn Motors set up a futuristic 15-storey showroom in December, dubbing it the “world’s largest luxury car vending machine”, while Carvana has built more modest versions in Tennessee and Texas.

While Carvana keeps the experience real with a machine that takes a token mega coin, Alibaba plans to plug its vending machines into its ecosystem that incorporates financing and data about the buyer’s credit standing.

Buyers with the requisite credit rating from Alibaba’s scoring system Sesame Credit will be able to drive off in their car with a 10 per cent downpayment, and continue to make monthly instalments through payments service Alipay.

Buyers appear to be lapping up the concept. Gary Hong, general manager of Autobahn Motors, said sales were up an annual 30 per cent to about 130 luxury vehicles following the move. He currently has a classic car being sold for almost $10m.

The business model reduces costs, including of the manpower need to store and keep cars clean and shiny.

Once a customer selects their car, said Mr Hong, it takes just a couple of minutes for it to be shuttled down from the tower — time spent watching an introductory video. “The cars always appear in their best light because of the spotlighting,” he said. “It’s like going to a jewellery shop or an Apple store.”

The cars are well-lit in displays in the building-cum-vending box, and are visible from the street through floor-to-ceiling windows.

Chinese shoppers have already shown themselves willing to buy cars online. Maserati sold 100 vehicles in 18 seconds during a flash sale on Tmall, while a similar sale saw fellow Italian luxury car brand Alfa Romeo sell 350 Giulia Milano cars in 33 seconds, according to Alibaba.

China, which has been the world’s biggest auto market for the best part of a decade, sold more than 28m cars last year, according to the government-backed China Association of Automobile Manufacturers.

Vending machines, particularly ubiquitous in Japan, are also popular in China, where there are an estimated 100,000 selling drinks, candy and other comestibles.

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