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Fewer stand-alones for Lincoln Mercury: Hint of the future?

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Fewer stand-alones for Lincoln Mercury: Hint of the future?

AMY WILSON

AUTOMOTIVE NEWS

DECEMBER 14, 2009 - 12:01 AM ET

BUFFALO, N.Y. -- Going into the store consolidations, Steve Baldo figured he finally could become the sole Lincoln Mercury dealer on the north side of Buffalo.

He once had buyout talks with Culligan Lincoln-Mercury, another stand-alone store seven miles away. The time finally might be right.

But in a tough economic climate, he made a business decision to concentrate on his other dealerships. He became a buyout recipient rather than a buyer.

Culligan took a buyout, too.

So Buffalo went from three stand-alone Lincoln Mercury stores in 2006 to one stand-alone and one franchise dualed with a Ford dealership.

Dualed stores in metro areas were once anathema to Ford Motor Co. executives. But Buffalo is one of many major markets in which Ford-Lincoln-Mercury stores are becoming commonplace -- and this has significant implications for Lincoln Mercury dealerships nationwide.

Stand-alone dealers fear competing with dualed stores that can spread overhead costs over higher sales volumes. Ford acknowledges that the number of dualed stores is increasing at the expense of stand-alone stores. In the wake of that transformation, the future of stand-alones seems uncertain.

But in Buffalo, the remaining stand-alone dealer isn't worried about his dualed competitor.

Frank Downing, in the south part of Buffalo, is that sole stand-alone Lincoln Mercury dealer. His only competitor: West Herr Ford-Lincoln-Mercury of Amherst in the north.

West Herr, the area's biggest dealership group, already had been selling a lot of Lincolns and Mercurys into Buffalo from a location outside the market. After consolidation was approved, West Herr closed the remote Lincoln Mercury business and added the franchise to its northern Buffalo Ford location.

To accomplish this, West Herr, along with Ford, bought out Culligan and Baldo. Baldo still operates Ford and General Motors Co. franchises in the market.

Downing, president of Towne Auto Group and Buffalo's No. 1 Lincoln Mercury dealer, figures he's prepared to compete against a dualed store. In 2007, he opened a new Lincoln Mercury store on the same site as Towne's Ford, Mazda and Hyundai stores. Some costs already are shared.

Downing built a Quick Lane service center attached to the Lincoln Mercury store. It serves Ford, too, but revenue goes to the Lincoln Mercury financial statements.

From 2006 to 2008, Towne Lincoln-Mercury's profits spiked 150 percent. Sales went from 340 new vehicles in 2006 to 600 in 2008. With the industry sales slide hurting the luxury business, Downing expects 2009 sales of 450 new vehicles.

Should business worsen, Downing now knows Ford probably will let him combine Ford and Lincoln Mercury, too. When that was proposed several years ago, the automaker said no.

Says Downing: "That's our disaster plan now."

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I wonder what is going to happen to my Lincoln-Mercury Volvo Suzuki dealer. The store they are in at the moment is extremely dated. They have some great customer service though, so I will be sad if Ford gives them the axe.

I dig this new style of Lincoln-Mercury store.

WittDay.jpg

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I wouldn't really be opposed to this if Ford and Lincoln/Mercury weren't so similar. Because the new Ford, Lincoln, Mercury dealership are really nice.

My guess is Ford is trying to get Ford right at the moment, and then will shift it's focus to further tuning and differentiating Lincoln (first) and Mercury (second)

They'd be DUMB not to.

In Charlotte we had a brand new (literally, the old building is still standing vacant with the old signage on it) VERY NICE stand alone Lincoln/Mercury dealer. I figured, being in Charlotte, it would continue to be a stand alone franchise. However, I drove by about a week ago to discover it completely abandoned... What a waste.

It's very sad that our industry has been reduced to this.

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In Ohio, the dealers my folks have frequented off and on for 35 years are right down the street from each other, a Ford/Chrysler/Dodge/Jeep dealer and a Lincoln/Mercury/Nissan dealer. They seem to be hanging in there...30 years ago, there were 2 other Ford dealers in the county, now this Ford dealer is the only one. There has only been one LM dealer in the county for as long as I recall.

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AFAIK, this was the only Lincoln/Mercury dealership in Charlotte. But, we do have a couple of HUGE Ford dealers, so my guess is that I'll see Lincoln/Mercury signage at one of those Ford dealers very soon.

In Charlotte we have an interesting situation. We have the REALLY BIG dealers (Like Hendrick, who sells EVERYTHING) and then we have the BIG dealers like this L/M dealer that I've been talking about. It seems that a lot of the "BIG" dealers are kind of getting the shaft in favor of the "REALLY BIG" dealers in all of the consolidation.

The Lincoln/Mercury dealership was very sad to me because it was the first dealership I had ever found that actually seemed like it genuinely TRIED to sell the two brands. They had excellent ads on TV comparing the models to the import competition and an excellent showroom. Most L/M dealerships I had come across up until that point seemed to be the bastard children of other franchises. For example; in Asheville, the L/M franchise was dualed with a Nissan franchise and the dealer advertised 100% Nissan and usually stocked 4-5 L/M vehicles on the entire lot. Kind of reminded me of the old Oldsmobile dealer in town which also carried Mercedes Benz, Chrysler and Jeep (at the time) The Oldsmobiles were kept literally BEHIND the building in their "section" next to the service bays.

I'm very interested to see how everything is going to shake out. In Charlotte we had 3 Cadillac dealers, 2 owned by the same group, both stand alone. One of those 2 has already been closed (surprisingly) and I/m not sure what's happening with the other one owned by that group (which is a nicer facility, but a worse location) or the 3rd, which is dualed and independent of the other two. Next to the now closed L/M dealer is an almost as new Pontiac, Buick, GMC dealer. But then right up the road from it is a Kia/Buick dealer who has had a Buick franchise since the 40s or 50s.

In Asheville we still have the Cadillac, Saab, Pontiac, Buick, GMC store which is in one building and is in bad shape; and is the only Cadillac dealer around. They've had a Cadillac franchise for a VERY long time (30s or 40s maybe) and fought GM tooth and nail when GM wanted them to become a Buick/GMC/Pontiac store instead of Cadillac/GMC/Pontiac. (So they added Saab and Buick from the town VW dealer) Be interesting to see if GM gives him the opportunity to build a proper Cadillac showroom or if they yank the franchise. (I'm betting on option 2)

And FWIW, the MB dealer that had Olds is now MB/Dodge/Chrysler/Jeep and Mitsubishi interestingly enough.

Edited by FUTURE_OF_GM
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