NINETY EIGHT REGENCY

Ford struggles to remake Lincoln

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Ford struggles to remake Lincoln

Luxury brand's reinvention taking longer than expected

Bryce G. Hoffman / The Detroit News

Dearborn --The refashioned Lincoln MKX that Ford Motor Co. unveiled at the North American International Auto Show last month may have brought the automaker one step closer to realizing its vision for the luxury brand, but dealers still are questioning the Lincoln strategy.

Lincoln did comparatively well last year, with demand dropping 22.8 percent while sales in the luxury segment overall fell 24.5 percent, according to Autodata Corp. But the rocket-like resurgence executives expected when they ordered a complete redesign of the brand in 2005 has failed to materialize.

Lincoln was supposed to overtake its sister brand, Mercury, become the dominant partner and ultimately eliminate the need for Mercury. Instead, Mercury continued to outsell Lincoln, and Ford now plans to add a small car to the Mercury lineup for 2012.

"You can credit some of that to the economy," said George Peterson, president of California-based consulting firm AutoPacific Inc. "But they've struggled with refashioning Lincoln into a bona fide American luxury brand."

It has been nearly five years since former Ford design chief Peter Horbury, fresh from an extreme makeover of Ford's Volvo brand, stood before Bill Ford Jr. and asked to do the same with Lincoln.

A screen behind Horbury displayed the next generation of every Lincoln product -- an unimpressive lineup of cars and trucks that bore an obvious resemblance to the Ford products on which they were based. A different grille and few different bends in the sheet metal was all that differentiated them.

Then a stunning array of modern luxury vehicles flashed on the screen, inspired by iconic cars like the 1941 Continental Cabriolet and the 1966 Continental. This, Horbury said, could be the future of Lincoln -- if Ford would pay for it.

With only minor differences, it was this lineup that surrounded Bill Ford as he introduced the new MKX last month at Cobo Center.

"In the early days, everybody knew what Lincoln stood for ... a Lincoln was simply luxury on wheels," said Ford, the grandson of Edsel Ford, who famously persuaded his father, Henry Ford, to buy the Lincoln brand in 1922. "As it was in my grandfather's day, when you look at today's product lineup, there is simply no question about what makes a Lincoln."

But there are questions about whether Lincoln's reinvention is going far enough, fast enough.

Ford acknowledges that the transformation of Lincoln is a work in progress, but prefers to emphasize the progress.

The company sold more Lincolns than Mercurys to retail customers in 2009, and says new models are attracting younger buyers and winning converts from other brands. Half of MKX crossover buyers, for example, are trading in competitors' vehicles. Lexus and Cadillac top that list.

Cutting-edge technology is a big part of the draw. But dealers say exclusive features such as automatic parallel parking and EcoBoost engines, which offer the power of a bigger engine with better fuel economy, were supposed to distinguish Lincolns in the luxury market but are migrating to Ford products too quickly.

"It's hard to sell a $48,000 MKS when the Ford guy down the street has a Taurus with the same features for $10,000 less," said Dave Knittel, general manager of Charlotte County Lincoln Mercury in Punta Gorda, Fla.

Dealers worry

While dealers are pleased plans to do away with Mercury were scuttled they also worry that both brands have been sidelined as Ford focuses on fixing its namesake Blue Oval marque. Responsibility for Lincoln Mercury, no longer a stand-alone division with its own leadership team, now rests with the same executives leading the Ford brand in North America.

"I have more dedicated Lincoln-Mercury employees than Ford Motor Co. does," said Chris Lemley, who owns Ford and Lincoln Mercury dealerships in suburban Boston. "They don't have any executives who wake up every day thinking about these brands."

Jim Farley, Ford's global head of marketing and sales, said dealers should not doubt Ford's commitment. "We have created a foundation for Lincoln we can build on," he said. "We have credible products that Lincoln loyalists and some new customers have embraced. We have an opportunity now to take the next step forward with Lincoln and start to grow and prosper again."

Understated Luxury

Ford Americas President Mark Fields said the overall plan for Lincoln is unchanged. "Lincoln is the volume piece of the business going forward," he said. "We now have a cohesive Lincoln lineup that shares a common DNA."

Ford needs to tip the scale in Lincoln's favor because it makes significantly more money off the higher-priced models. But critics say Lincolns often have a higher base price than competing models. Fields agreed that is sometimes the case, but challenged consumers to compare what each offers for the money.

A top-of-the-line Lincoln MKT, for instance, sells for $49,995; a similarly equipped Audi Q7 would cost $61,825.

"If people were cross-shopping Audi and Lincoln, that would be great," said analyst Jim Hall of 2953 Analytics LLP in Birmingham. "Audi buyers are shopping for a style statement. They're not even looking at Lincoln. Lincoln still has not gotten back up to first-tier luxury."

Though Horbury has returned to Volvo, his replacement has promised to continue Lincoln's transformation. Ford Americas design chief Moray Callum said Lincoln will offer understated luxury he thinks is in line with the times.

"That's what we hope we're doing, bit by bit, vehicle by vehicle."

From The Detroit News: http://www.detnews.com/article/20100216/AUTO01/2160369/1148/?source=nletter-business#ixzz0fhmKg6my

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Lincoln has too little bang for the buck. They either need to get totally stylish and expensive looking or drop their prices drastically and settle in as a near luxury brand.

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I think Lincoln will come into much better Focus once the OneFord plan gets a bit further along. The Fusion of platforms across all Continentals will allow them to put more Edge into their designs. The Ford/Ford+/Ford+Chrome setup is something they need to Escape.

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I saw a speculation elsewhere that the rumored MILAN MCE to show at NYC (AutolineDetroit )

is in part to make its Look harmonize better with the tRACER's

...there's also a DetroitNews article that says:

"...There's no reason not to suspect that when a new MKZ arrives later this year, it will look less like the Ford Fusion and more like the Lincoln MKS..."

IS AN EXTREMELY EARLY MCE GOING TO HAPPEN FOR BOTH L-M MIDSIZERS???

if YES, this sounds to me like Fomoco is going to ignite the afterburners on the Lincoln-Mercury starship...

also

the nextgen Kuga would make a fine global-Lincoln MKG

&

a nextgen replacement for the FocusCabrio would be a natural as a global-Mercury Capri!

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The way I see it they're going after Buick not Caddy.Also sounds where Old's was going before they got the axe.

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getting rid of volvo, mazda, jag, aston, etc. really at least helps ford concentrate effort on trying to rebuild lincoln and mercury.

to me, the MKs is unfinished. It needs more sizzle but the steak is good beef to start with. They have room to do a lot with the MKs.

The MKx should flourish now that is has been improved.

The MKt is a product that is ridiculed in photo but once you see it and study it, it becomes that much more attractive. It could very well be the best lux crossover out there. If i can find a cream puff used one with ecoboost someday for a tolerable price i will be giddy.

The MKz is popular in some parts and I guess to some small degree its the LaCrosse of the Lincoln line. A powder puff cruiser like the Lexus ES. The car your 59 year old father gets to drive to church retreats in.

The concept MKr was on the right path for a 'sports sedan' Lincoln....so where is it? I would be sized physically smaller a tish than the CTS and for sure a bit larger than the 3 series. RWD biased chassis, perhaps this will be based for the next Mustang.

Navigator stays. It's an icon. This vehicle is in hiding but folks will always like this vehicle.

IMO, if Lincoln can bring an MKr to market then they do not need a compact...or they downsize the MKz a bit.

Apparently Mercury will be rebadged Fusions, Escapes, Focus'....not really a bad thing.

Mercury should bring back the coupe (Cougar) and a convertible.

Lincoln probably needs a new halo car and to be honest a town car like vehicle would make sense if they werent putting their eggs in the MKS basket.

Lincoln just needs to be careful on price, sizzle up the styling, make exclusive features and tech, and get on a serious marketing campaign.

Edited by regfootball
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I don't think Lincoln can ever be taken seriously until they drop the whole "MK" nomenclature. It just sounds stupid. Have one car called the Mark X or whatever and give the other cars some real names like Continental and Town Car.

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L-M dealers fret: Can they have future minus Ford franchise?

Lack of products is top concern

Jamie LaReau

Automotive News -- March 15, 2010 - 12:01 am ET

Joseph Thurby Jr. calls himself a survivor.

He has been a stand-alone Lincoln-Mercury dealer since 1971. But Thurby fears for his survival if he can't add a Ford or other franchise in the next few years.

"The only other answer is to find another franchise, any other type of franchise -- Suzuki, Honda -- you name it," Thurby said. "We're a dwindling group of dealers."

Like Thurby, many stand-alone Lincoln-Mercury dealers think their best hope for long-term survival is to add a Ford franchise. Without one, they worry that their dealerships won't have the volume and products to compete. To survive in the meantime, many dealers are cutting staff and inventory.

For its part, Ford Motor Co. is sticking to its plan to consolidate Lincoln-Mercury with Ford franchises in major metro areas. At the end of last year, Ford had 292 stand-alone Lincoln-Mercury stores, down from 357 at the end of 2008.

"We'll focus on the metro markets," Ken Czubay, Ford's vice president of U.S. sales and marketing, said last month at the National Automobile Dealers Association convention. "We'll continue to have a dialogue on an individual basis in the big cities on the stand-alone points."

In an online survey conducted by Automotive News, 38 of the 53 Lincoln-Mercury stand-alone dealers who responded -- 72 percent -- said they are at a competitive disadvantage with Ford-Lincoln-Mercury dealerships. The top reason cited: a lack of products to appeal to a wide customer base.

Ford Motor leaders are aware of Lincoln-Mercury dealers' product concerns. They declined to comment on the future product strategy. But last month Ford announced that it would add a small car, the Mercury Tracer.

The Tracer -- a Mercury name revived from the late 1990s -- is a derivative of the Ford Focus. It will go on sale next year, and many dealers say it will help.

Thurby expects to sell about 200 Tracers annually, which would nearly double his current annual sales of 250 new Lincoln and Mercury vehicles.

Ramon Alvarez, owner of Alvarez Lincoln-Mercury-Jaguar in Riverside, Calif., hopes to sell at least 50 Tracers next year. Now he sells about 150 new vehicles a year. He said he sold about 100 Tracers a year in the late 1990s.

Alvarez is working aggressively to acquire a Ford franchise, but he knows it's a long shot because a Ford store is right across the street from his dealership.

Asked whether he'd consider a different franchise, Alvarez said, "You gotta do what you gotta do."

The price of survival

To stay abreast of the competition, Alvarez said, he works seven days a week. He greets every customer and goes out of his way to deliver vehicles to boost customer loyalty.

Alvarez has reduced his staff by 20 people -- about one-third -- in the past 18 months. He also has cut inventory to whittle away at costs.

"We're down to about a 45-day supply," Alvarez said. He used to carry a 90-day supply.

Alvarez said it has come down to using fewer paper clips and turning off the lights early: "I've even cut back on ground floor mats for the dealership."

Dealer Dan Pfeiffer once owned two stand-alone Lincoln-Mercury stores in the Grand Rapids, Mich., area, a market with about 1 million customers, he said.

Last fall, Pfeiffer closed Dan Pfeiffer Plainfield Lincoln-Mercury after owning it for 23 years. He was selling about 120 new vehicles a year compared with about 600 a year in the late 1980s and early 1990s -- when Mercury had the Villager minivan, Lynx small car and Cougar coupe, which have all been dropped.

Mercury now offers just four nameplates. Last year Mercury sold 92,299 vehicles, compared with 359,143 vehicles and six nameplates in 2000 -- its high-water mark for the decade. Lincoln, which offers six nameplates, sold 82,847 last year, down from 193,009 in 2000.

On the other side of town, Pfeiffer still owns Pfeiffer Lincoln-Mercury, which sold 400 new vehicles last year, down from 1,300 in the mid-1980s.

Survival has meant cutting all expenses, including his ad budget. Pfeiffer stocks only 50 vehicles at any given time, compared with 250 in previous years.

"We have a computer that turns the heat down when we close at night," Pfeiffer said. "It hurts, but if we didn't do all of that, we couldn't exist."

Pfeiffer does not want to surrender his Lincoln-Mercury franchises to one of the four nearby Ford dealers. Ford has not approached him -- yet.

Most Lincoln-Mercury dealers say Ford is not pushing them aggressively to sell their stores or helping some stand-alone Lincoln-Mercury dealers acquire others. Instead, Ford is emphasizing consolidation in its top 130 major metro markets.

"We have no plans to consolidate our rural dealers," said Steve Kincaid, a Ford spokesman.

Ford executive Jim Farley said five years from now, there still will be Lincoln-Mercury stand-alone stores.

"In the luxury market, almost 75 percent of the volume is in 10 metro markets," Farley, group vice president of global marketing, said in an interview at the Geneva auto show.

"Those customers expect an exclusive experience, but we'll have many fewer [stand-alones] than we do today."

Read more: http://www.autonews.com/article/20100315/RETAIL03/303159967/1078#ixzz0iFXqfRxk

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Lincoln-Mercury is really starting to look bad compared with parent Ford. FoMoCo needs to start thinking about how it can make these brands compete without being just fancy Fords sold at low prices.

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Without Mercury, Lincoln dealers face grim future

Dealer Darryl Wischnewsky: Wooing Volvo to replace Mercury

For Lincoln-Mercury dealer Darryl Wischnewsky in Houston, survival boils down to one thing: getting a Volvo franchise.

Wischnewsky has a letter of intent from Volvo and is awaiting final approval. Without another franchise, he worries, his store -- which will have only Lincoln when Mercury dies in the fourth quarter -- will be doomed.

Meanwhile, he says: "You have to cut all unnecessary expenses. That means going straight to advertising; then comes personnel."

Ford Motor Co's decision to kill the Mercury brand by year end is essentially a death sentence for many of the 276 Lincoln-Mercury dealerships. In most cases, Lincoln cannot stand alone, Ford and many dealers say. Options for Lincoln-Mercury dealers are limited: find a replacement franchise such as Ford, sell out or drastically cut costs.

Many Lincoln-Mercury dealers are putting on a brave face, but few have quick answers. Some hope Ford revs up marketing and delivers fresh products for Lincoln.

"We already have good product. What we haven't had is dedicated marketing," says Ed Witt, owner of Witt Lincoln-Mercury in San Diego. "That's going to make a huge difference."

Mike Jackson, CEO of AutoNation Inc., has one stand-alone Lincoln-Mercury dealership and is glad that's all. He does not believe most Lincoln stand-alones will survive.

Lincoln "simply doesn't have the brand strength, the product portfolio or the throughput relative to the number of dealers it has to support it as a free-standing dealership," he says.

Ford Motor's leaders acknowledge that some stand-alone Lincoln-Mercury dealers will fail with just Lincoln, but they decline to estimate how many. Last year, 92,299 Mercurys were sold and 82,847 Lincolns. Lincoln's sales trail those of other upscale competitors.

Ford is encouraging Lincoln and Ford dealers to buy others out to establish Ford-Lincoln dealerships. In some cases, Ford has chipped in cash. Ford insists it will not force any deals.

"Our approach will be very consistent with the approach we've had for the last four or five years: work with the dealers, consolidate where it makes sense and go from there," Mark Fields, Ford's president of the Americas, told Automotive News.

7 products promised

Ford is promising seven new or significantly improved Lincoln products during the next four years. The Lincoln lineup now has six vehicles.

But some Lincoln-Mercury dealers believe that Ford will funnel the fresh inventory to Lincoln franchises that are paired with Ford franchises because they get more showroom traffic.

"What's left for Lincoln-Mercury dealers is like a box of Cracker Jack and a canteen of water, and they want you to walk across the desert with it to get to the promised land," says a Ford-Lincoln-Mercury dealer who asked to be anonymous.

The dealer says Mercury accounts for half his 300 annual Lincoln-Mercury sales. Even though he also has a Ford franchise, he predicts he will have to lay off staff when Mercury dies.

Bob Tasca Jr., chairman of the Ford Lincoln Mercury National Dealer Council, says he has had dozens of calls from anxious Lincoln-Mercury dealers. He suggests that they get another franchise, build service revenue or expand sales of used vehicles.

All three tasks are challenging. In an age of consolidation, few automakers are offering franchises. Some dealers say word of Mercury's demise has hurt used-vehicle sales because customers fear cars of a dead brand won't hold value. And the end of new-Mercury sales means fewer service customers.

Tasca sells 2,500 new vehicles annually at his two Ford-Lincoln-Mercury stores. About 300 are new Mercury vehicles. He believes his sales will remain flat next year because Mercury owners will buy Fords.

"I've had a long-standing relationship with these customers," says Tasca, owner of Tasca Automotive Group with stores in Cranston, R.I., and Seekonk, Mass. "They don't only buy Mercury. They buy Tasca."

Wischnewsky, owner of Bayway Lincoln-Mercury, will cut $30,000 from the $75,000 a month he spends on advertising to prepare for life with a stand-alone Lincoln store. Last year, Wischnewsky sold 900 new Lincoln and Mercury vehicles, down from 1,200 earlier this decade.

Mercury's demise means he will lose about 360 new-vehicle sales a year and some used-vehicle sales, he says.

Lenders are gun-shy

Lenders already are gun-shy about financing late-model Mercury vehicles, Wischnewsky says. And customers are leery of buying new Mercurys. He says one woman almost refused delivery of a new Mercury after she heard Ford was killing the brand.

Wischnewsky isn't alone in his bid for a new franchise. He knows three Lincoln-Mercury dealers who are doing the same thing.

The reason, he says, is painfully clear: "These are dealerships we planned on passing down in our families, and that dream just got yanked out."

Amy Wilson contributed to this report

Luxury laggard

Lincoln's U.S. sales trail those of other luxury brands through May.

Lexus 90,098

Cadillac 52,997

Acura 50,278

Infiniti 38,996

Lincoln 37,444

Source: Automotive News Data Center

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100614/RETAIL07/306149934/1256#ixzz0qpkIEgxE

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LINCOLN DEALERS FEAR FOR SURVIVAL AS MERCURY DIES

By Drew Johnson

Most Lincoln-Mercury dealers remained optimistic following Ford’s announcement to shutter the Mercury brand, but the 276 standalone Lincoln-Mercury stores are beginning to get nervous as the reality of a single-brand storefront starts to sink in.

While some Lincoln-Mercury dealers remain steadfast in their belief that a Lincoln franchise can stand on its own, most dealers – along with Ford – have openly stated that most franchises will fail without the addition of another dealership.

Lincoln “simply doesn’t have the brand strength, the product portfolio or the throughput relative to the number of dealers it has to support it as a free-standing dealership,” Mike Jackson, CEO of AutoNation Inc., told Automotive News. AutoNation owns just one standalone Lincoln-Mercury dealership.

Ford has promised 7 heavily revised or new Lincoln products over the next four-years, but it remains to be seen if that will be enough to keep the brand relevant in the luxury segment. Through the first five months of the year Lincoln trails cross-town rival Cadillac by more than 15,000 sales, and is currently 52,600 sales behind Toyota’s Lexus Luxury brand.

Mercury was the volume leader of Lincoln-Mercury stores last year, outselling Lincoln 92,229 units to 82,847 units.

link:

http://www.leftlanenews.com/lincoln-dealers-fear-for-survival-as-mercury-dies.html

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