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Ford's next challenge: Rev up Lincoln

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Ford's next challenge: Rev up Lincoln

Jamie LaReau

Automotive News -- June 7, 2010 - 12:01 am ET

DETROIT -- Ford Motor Co. must do with Lincoln what it has done with the Ford brand -- infuse it with new energy and sparkling product -- if it is to offset the loss of Mercury sales when that 71-year-old brand dies.

Though Lincoln has a freshened lineup and stronger styling than in the past, it is still an also-ran among luxury brands in the United States. Ford clearly will need more volume from Lincoln to appease Mercury dealers -- especially those who currently have Lincoln-Mercury stores.

"We have to make a very compelling case to our dealers very quickly," says Mark Fields, Ford's president of the Americas, in an interview.

Ford's decision last week to kill Mercury allows the automaker to focus its resources on the Ford and Lincoln brands. But, initially, at least, closing Mercury means Ford Motor has to give up the 92,299 sales Mercury reported last year. And the challenge to take Lincoln upscale requires consistency and discipline in product and marketing.

Mercury sales represent about 50 percent of most Lincoln-Mercury stores' volume. Ford leaders know filling that gap will be a challenge.

Ford likely will retain two-thirds of its Mercury customers through the Ford brand, predicts Jeremy Anwyl, CEO of Edmunds.com in Santa Monica, Calif. That's because of the heavy cross-shopping Mercury customers already do with Ford products.

Likewise, Anwyl says, Ford could be poised for great success with Lincoln if it treats it as it has the Ford brand.

"Where Lincoln is today is where Ford was a few years ago," he says. "The staff that is working on Mercury will now shift to Lincoln. To me, that gets to the heart of the matter."

Ford Motor CEO Alan Mulally has gotten "a distracted organization to focus with intensity on Ford as a brand," Anwyl says. "Now he's saying, 'Let's see if we can do the same for Lincoln.'"

Ford has work to do. According to Edmunds.com data, the percentage of U.S. consumers who would consider buying a Lincoln fell over the past year, from 1.3 percent in May 2009 to 0.9 percent last month. Through May, Lexus sold 90,098 vehicles in the United States, and Cadillac sold 52,997. But Lincoln sold just 37,444.

Ford says Lincoln's retail share of the U.S. luxury market has grown from 4.5 percent in 2005 to 6.3 percent through the first quarter. It also says favorable opinion of the brand and purchase consideration are at their highest level in five years; it did not provide numbers.

Product improvement

Money invested in a single brand -- both for product and marketing -- is more likely to yield "game changers" than spreading that same money across two brands, says Lincoln Merrihew, managing director of automotive at Compete Inc., a consumer research firm in Boston.

"Game changers have the best chance of driving sales for the company and the dealers," he says.

Merrihew advocates that Ford do a "Lincoln-only product" that grabs attention and serves as a halo, as the Lexus LFA sports coupe did.

"It doesn't have to be a money maker," Merrihew says. "Just be something very distinctive."

Ford's Fields says future Lincolns will stand out with advanced technology such as active noise cancellation, unique powertrains, adaptive suspensions and glass retractable roofs that Ford products do not get. Ford will spread the EcoBoost engine, a turbocharged direct-inject engine, across the entire Lincoln lineup, including the Navigator SUV.

Ford plans on expanding the Lincoln lineup with seven all-new or "significantly refreshed" vehicles in the next four years. Those include a product on the same size platform as the Ford Focus compact car. That might mean a small crossover based on the European Kuga for Lincoln. Ford declined to specify the vehicle. Lincoln could also get a U.S. version of the Mondeo sedan currently sold overseas.

Sticking to the plan

Lincoln's product lineup needs improvement, says Jim Hall, principal of 2953 Analytics Inc. in suburban Detroit.

"If they want to be a serious competitor with Lexus and Cadillac, they cannot do it successfully with mildly reworked Fords," he says.

Ford management should form a 10- to 15-year product strategy and marketing plan for Lincoln and stick to it, Hall says.

"They are surrounded by insurmountable challenges: get the product better; improve the marketing; be consistent," he says. "They can't be changing Lincoln's tag line each year."

Hall adds: "That'll be difficult for the traditional Ford organization to do, and it'll take Mulally and [global marketing chief] Jim Farley to hold their feet to the fire and say don't change the plan."

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100607/RETAIL03/306079975/1256#ixzz0qNZ7Pkfn

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"It doesn't have to be a money maker," Merrihew says...

if FoMoCo wanted to make money with any non-Ford Brand,

they'd have kept Mercury.

(sorry if off-topic - couldn't read the rest of the article after noticing that quote)

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