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Ford summons dealers to discuss Lincoln's future

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Ford summons dealers to discuss Lincoln's future

September 9, 2010 - 1:16 pm ET

DETROIT (Reuters) -- Ford Motor Co. plans to host a meeting for its Lincoln dealers in early October to discuss its plans for re-energizing a brand that has long trailed luxury market competitors such as Cadillac and Mercedes.

The meeting set for Oct. 4 at Ford headquarters comes as the automaker prepares to phase out its Mercury brand and continues negotiations with dealers on compensation for dropping the brand.

"It will be a Lincoln update. It's more about giving dealers a look how Ford will now work with Lincoln as an exclusive, luxury brand," Ford spokesman Christian Bokich said of the planned dealer meeting.

Of the roughly 1,700 Mercury dealerships, most are paired with Ford or Ford and Lincoln. But as of the end of July there were about 264 Lincoln-Mercury dealerships.

Many of those dealers have depended on Mercury for the bulk of their sales and some see an uncertain future when they are reliant only on Lincoln.

Mercury dealers have been in ongoing discussions with Ford over compensation. Some dealers have been offered payouts of $300,000 to $400,000 each in a bid by Ford to avoid a drawn-out legal battle, a person familiar with the discussions has said.

Bokich said it would not be clear how many Lincoln dealers would emerge as stand-alone sales points for the brand until after the Oct. 4 meeting.

He declined to comment on compensation being offered to Mercury franchise holders, saying those negotiations were ongoing.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100909/RETAIL07/309099968/1256#ixzz0z4ZyjmXi

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Ford to Ask Lincoln Dealers to Upgrade Showrooms, Improve Customer Service

By Keith Naughton - Sep 9, 2010 3:02 PM CT

Ford Motor Co. will ask its Lincoln dealers to upgrade their showrooms and improve customer treatment to help invigorate the brand that ranks eighth among luxury car lines in the U.S.

The 1,187 Lincoln dealers have been called to Ford’s headquarters in Dearborn, Michigan, on Oct. 4 to discuss the brand’s future, said Christian Bokich, a company spokesman. This is the first meeting of Ford’s Lincoln dealers in more than two years, he said. Ford is discontinuing its mid-level Mercury line at the end of the year, which most Lincoln dealers also sold.

“This is a real business discussion, it’s not a pep rally,” Bokich said. “This is a discussion about the initiatives Lincoln will take and what will be expected of the Lincoln dealers since Mercury is no longer on the horizon.”

The new expectations will include improving customer service and renovating showrooms as Ford introduces seven new or improved Lincoln models in the next four years, Bokich said. The new models include a small car, which dealers won’t be shown, Bokich said.

Lincoln’s U.S. sales have risen 4.7 percent this year, while sales of Ford-brand cars and trucks have gained 20 percent, according to researcher Autodata Corp. Total U.S. light vehicles have increased 8.4 percent this year, Autodata said.

Toyota Motor Corp.’s Lexus, the top-selling luxury line in the U.S., sold 145,490 cars and trucks this year through August, compared with 55,776 for Lincoln.

Reuters reported earlier that Lincoln dealers would be meeting.

link:

http://www.bloomberg.com/news/2010-09-09/ford-has-called-its-1-187-lincoln-dealers-to-headquarters.html

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Report: Ford requests meeting with Lincoln dealers

by Chris Shunk (RSS feed) on Sep 10th 2010 at 10:29AM

With Mercury on the way to the morgue, there are plenty of very nervous Lincoln dealers in the United States. Ford Motor Company is looking to calm those nerves a bit by inviting dealers to Dearborn, MI on October 4. Automotive News reports that The Blue Oval is going to show dealers its plans for its North American-only luxury arm.

Ford spokesman Christian Bokich tells AN that the event is all about the future of Lincoln, adding "It's more about giving dealers a look how Ford will now work with Lincoln as an exclusive, luxury brand." There is no word at this time concerning the content being covered, but we're expecting Ford to show future product, along with how the automaker will further differentiate the four-pointed star from the Ford brand in the years to come. Bloomberg is also reporting that Lincoln dealers will be asked to upgrade their showrooms and work on improving customer service. There are currently 264 retail outlets that do not sell Ford product, and at this point many dealers don't know if they will live on as stand-alone Lincoln dealers in the future.

One interesting byproduct that could result from the meeting will be the likely product leaks that are soon to follow. Among the future vehicles anticipated to be added to the Lincoln brand are a Focus-sized C-segment small car inspired by the Concept C from the 2009 Detroit Auto Show and a similarly proportioned crossover.

link:

http://www.autoblog.com/2010/09/10/report-ford-requests-meeting-with-lincoln-dealers/

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FORD CALLS FIRST LINCOLN DEALER MEETING SINCE 2008

By Drew Johnson

With the Mercury division officially out of the way, Ford has called its first meeting with Lincoln dealers since 2008. The meeting will be hosted in Dearborn on October 4.

"It is certainly more than overdue for us to touch base with our dealers," said Lincoln spokesman Christian Bokich.

The meeting is expected to focus on the future of the luxury brand and how Lincoln can improve the luxury buying experience. However, Ford will also likely breach the topic of dealer cuts. Ford currently has 276 stand alone Lincoln-Mercury dealers, but it’s unlikely that those stores will survive on Lincoln volume alone.

Lincoln’s sales have increase by 4.7 percent this year, but the brand still ranks 9th among luxury nameplates. Further indicating Lincoln’s struggles, the luxury marque has more than three times the dealer network of some of the luxury brands ahead of it on the sales list.

link:

http://www.leftlanenews.com/ford-calls-first-lincoln-dealer-meeting-since-2008.html

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Lincoln to ax 200 metro stores

Survivors must upgrade to match premium rivals

Jamie LaReau

Automotive News -- September 27, 2010 - 12:01 am ET

DETROIT -- In an attempt to inject more luxury into its last remaining premium brand, Ford Motor Co. wants to cut at least 200 Lincoln franchises, or 40 percent of its dealers in major metropolitan areas.

Ford will require substantial dealership upgrades intended to raise Lincoln's game in terms of customer experience to the level of such luxury brands as Cadillac, Lexus, Mercedes-Benz and BMW. This push is being driven by luxury consumers who say that Lincoln doesn't match its competitors.

Multiple sources said Ford is expected to outline the plan at a two-day Lincoln dealer meeting that begins Monday, Oct. 4, in Dearborn, Mich.

Small, rural, markets are less of a target, sources said.

The death of Mercury -- which accounted for most of the volume for Lincoln-Mercury dealers -- is prompting Ford to move faster to pair Lincoln with Ford-brand dealers. Still, in some large metro markets, there will still be stand-alone Lincoln stores, Ford executives have said.

After shedding Aston Martin, Land Rover, Jaguar and Volvo over the past three years or so, Ford wants to create a premium showroom experience for its final premium brand.

Lincoln has its work cut out for it. Twelve years ago, it was the top-selling luxury brand in the United States with sales of 187,121 units. Last year, Lincoln sold 82,847 units, ranking seventh among luxury brands and far behind leader Lexus' 215,975 sales.

Ford believes it can increase per-store traffic by having fewer locations in major metropolitan areas. The average number of sales per Lincoln store last year was 67 compared with Lexus' 947. As of Jan. 1, Lexus had 230 U.S. stores, and Lincoln had 1,221, down from 1,596 in 2000. Also as of Jan. 1, Audi had 270 stores; BMW had 338 stores, and Mercedes had 352.

Ford has 495 Lincoln stores in metro areas. It wants to have about 300 metro area dealerships by reducing a mix of stand-alone and dualed stores based on the competitive nature of each market, sources said.

Investment in Lincoln stores is also a priority. That strategy will include higher facilities standards and improved customer service. Those higher standards might prompt some dealers to cash out, sources said.

In some cases Ford will offer buy-out packages to dealers.

'An aggressive plan'

Mercury's imminent death and the consolidation of Lincoln with Ford brand stores are also factors in the consolidation strategy.

With Mercury being wound down by Dec. 31, some 261 U.S. Lincoln dealerships now dualed with Mercury will become stand-alones. Ford insiders say they expect some stand-alone Lincoln dealerships to continue in large metro markets.

A spokesman for Ford said the Lincoln dealer meeting will focus on "the luxury customer experience."

"The future direction of the Lincoln ownership experience has been charted on a joint basis between Ford Motor and select dealer representatives," spokesman Christian Bokich wrote in an e-mail. "It is important that Lincoln dealers are the first to hear about this information from the company."

Ford's leadership team worked with 10 Lincoln dealers on the plan to revamp the brand.

But a dealer familiar with the advisory group said Ford did not reveal a goal to cut 200 franchises.

"That's an aggressive plan," said the Lincoln dealer who asked not to be identified.

Mercury's death will enable Ford to put more marketing and product-development dollars into Lincoln.

"We're going to make a major investment in Lincoln over the next four years with seven new or significantly refreshed products," Mark Fields, Ford's president of the Americas, told analysts in Southfield, Mich., last week.

Ford plans to add a compact, front-drive car or crossover to the Lincoln brand. There is also talk that a car based on the next-generation Ford Mondeo, which is sold in Europe, could be added.

In the future, Lincolns will get features such as active noise cancellation and adaptive suspensions.

But Ford faces a challenge to make Lincoln competitive during a time when mass-market brands are increasing their levels of technology and premium brands are increasing their level of premium amenities.

AutoNation CEO Mike Jackson, who has one stand-alone Lincoln store, said he is focused on the Ford brand and not Lincoln as a stand-alone brand.

'No man's land'

"I think the strategic challenge for all near-luxury brands is that there's two chairs -- premium and mass market -- and you don't want to be caught between the two," Jackson told Automotive News last week. "Between those two chairs you are trying to live in a no man's land, and it's very tough. You sort of have to decide which way you're going to go."

A look at Lincoln's loyalty rates vs. those of its competitors is telling. Edmunds.com reports that 24.6 percent of Lincoln customers are repeat customers. Loyalty rates for other luxury brands are much higher. Lexus' loyalty rate is 46.5 percent, for example; Mercedes' is 47.8 percent. Cadillac's is 29.2 percent, and BMW's is 37.5 percent.

Edmunds.com data show that the projected residual value of a 2010 Lincoln after five years is 33.8 percent compared with five-year residuals of 44.1 percent for Lexus and 37.4 percent for Cadillac.

Sales per store

Avg. sales per store in 2009

Lincoln 67

Cadillac 80

Audi 306

Mercedes-Benz 546

BMW 581

Lexus 947

Source: Automotive News Data Center

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100927/RETAIL03/309279930/1400#ixzz10jdVzMIo

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Report: Lincoln plans to close 200 metro dealers, upgrade the rest

by Jeremy Korzeniewski (RSS feed) on Sep 27th 2010 at 6:21PM

Now that Ford has officially announced that its Mercury division would be going the way of the Dodo, and with Blue Oval-branded models like the Taurus SHO proving that the Dearborn automaker can indeed move itself a bit upmarket, the next logical concern is addressing what will happen to Lincoln. That's especially true given the fact that Lincoln's 82,847 total sales in 2009 are a mere pittance compared to that of class-leading Lexus, which moved 215,957 vehicles.

One of the big problems with Lincoln is that there are just too many dealerships trying to sell a car to in-market customers. To wit, Lincoln currently boasts a whopping 1,221 stores in the States. By way of comparison, Lexus has 230, Audi has 270, BMW has 338 and Mercedes-Benz has 352. Do the math and it's easy to see that each Lincoln dealership doesn't sell very many vehicles – in fact, they're averaging just two sales per week.

According to Automotive News, Ford has a two-part plan to inject some life into its moribund Lincoln outlets. First, the total number of dealerships will be reduced by at least 200, and most of those closures will happen in large metropolitan markets where there are already multiple stores. Second, remaining outlets will be heavily upgraded in order to compete with Lincoln's targeted competitors.

Will it work? Hard to say, but if the brand can build models like the rumored production version of the Concept C showcar, it could certainly inject some life into Lincoln. In any case, we should get a few more details around October 4, which is when Lincoln's annual dealer meeting is scheduled to begin.

LINK:

http://www.autoblog.com/2010/09/27/report-lincoln-plans-to-close-200-metro-dealers-upgrade-the-re/

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Lincoln Dealers May Bail Rather Than Reinvest for 2 Sales a Week

By Keith Naughton - Sep 24, 2010 3:22 PM CT

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March 31 (Bloomberg) -- Alan Mulally, chief executive officer of Ford Motor Co., talks with Bloomberg's Doron Levin about the automaker's decision to focus its Lincoln luxury brand mainly on the U.S. market. They speak from the New York International Auto Show. (Source: Bloomberg)

A line of Lincolns, left, sits next to a row of Fords at the Springfield Ford Lincoln-Mercury dealership in Springfield, Pennsylvania. Photographer: Scott Lewis/Bloomberg

Stephen Amabile, Sales Manager at Springfield Ford Lincoln-Mercury dealership in Springfield, Pennsylvania. Photographer: Scott Lewis/Bloomberg

Ford Motor Co.’s Lincoln dealers may be facing the bleakest days in the brand’s 93-year history. Soon they will have to decide whether to double down on the luxury line or walk away.

Sales have plunged almost two thirds from their peak and now average fewer than two vehicles a week for each dealer, one- thirteenth the volume of Toyota Motor Corp.’s Lexus.

Most of Ford’s 1,187 Lincoln dealers also sell Mercury vehicles, and will lose more than half their sales when the automaker discontinues the mid-priced line at the end of the year. Now the company may ask them to spend as much as $2 million each to upgrade showrooms and improve customer service at a meeting in Dearborn, Michigan, on Oct. 4.

Lincoln lags behind other luxury lines as its buyer base ages and it fights an image driven by the Town Car, the typical airport shuttle of corporate executives. Lincoln sold an average of 5.8 cars per showroom a month in 2009, compared with Lexus’s more than 78, according to company data and research firm Grant Thornton.

“You can’t make it on that; it’s just impossible,” said Jack Kain, a Ford and Lincoln dealer in London, Kentucky. “Ford has got to do something.”

The second-largest U.S. automaker says it is. Chief Executive Officer Alan Mulally has sold off the Volvo, Aston Martin, Jaguar and Land Rover brands and is focusing on Lincoln, now Ford’s only luxury line, to get a bigger slice of the more- profitable premium-car market. The company is attempting to attract younger buyers to Lincoln with redesigned models like the MKX sport-utility vehicle and touch-screen technology to operate phone, stereo and climate controls.

‘Major Investment’

After peaking at 231,660 vehicles in 1990, Lincoln’s U.S. sales fell to 82,847 last year. While sales have edged up 4.7 percent this year, those of General Motors Co.’s Cadillac have surged 50 percent. Total U.S. sales of luxury models are up 15 percent, according to J.D. Power & Associates.

“We’re going to make a major investment in Lincoln over the next four years with seven new or significantly refreshed products,” Mark Fields, Ford’s president of the Americas, told auto analysts in Southfield, Michigan, yesterday. “Our approach is to enhance and expand Lincoln here in the U.S. and then we can think about maybe looking at global opportunities.”

Ford rose 25 cents, or 2 percent, to $12.56 at 4:15 p.m. in composite trading on the New York Stock Exchange. The shares have risen 26 percent this year.

Shedding Dealers

Ford also is slashing dealerships, attempting to cut its U.S. dealer base in half to about 3,000 to reflect a market share that has dropped to 17 percent from 25 percent in the late 1990s, said Jim Farley, the automaker’s marketing chief.

The retrenching means the company will buy out many Lincoln outlets or pair them with Ford dealers, whose sales have risen 20 percent this year, said Stephen Amabile, a Ford and Lincoln dealer in Springfield, Pennsylvania. That would buttress dealers’ finances in the short run.

“I don’t see how a stand-alone dealer can sell six cars a month and stay in business,” Amabile said. “We’d be disappointed if we didn’t sell that many in a day.”

The Oct. 4 meeting with Ford may be bad news for some Lincoln dealers as the automaker lays out its higher expectations for the brand after the Mercury line disappears from their showrooms, said Bob Tasca Jr., head of the Lincoln- Mercury dealer council.

“After that meeting, dealers are going to have to decide if they can make it without Mercury,” said Tasca, who owns Lincoln-Mercury and Ford showrooms in Rhode Island and Massachusetts. “Dealers will have to decide if it’s a good business case making the extra investment” in Lincoln.

Similar Models

Selling the two surviving brands together may end up hurting Lincoln as consumers compare the models and find the Ford a thrifty alternative, said Paul Melville, a Grant Thornton auto-retailing analyst in Southfield, Michigan. The Lincoln MKS and Ford Taurus, built in the same Chicago factory, share a mechanical foundation and many amenities.

“Ford needs to be careful about getting Lincoln too tied to Ford dealerships,” Melville said. “Lincoln is starting to do a better job of distinguishing itself, but it’s going to take a lot of money and hard effort to get it to be a true luxury brand.”

7 Models

A new Lincoln small car is among the seven new or improved models Ford has said are coming from Lincoln by 2014. The Dearborn, Michigan-based automaker has overhauled Lincoln’s design theme to outfit models with prominent, split-bow grilles. It also is dedicating engineering and marketing staff to Lincoln, rather than having the brand share personnel with Ford.

“I don’t see a whole lot of new customers coming to the Lincoln brand in the next 12 months or so,” said Amabile, the Pennsylvania dealer. “Until we have an entry-level SUV and the small car, I don’t see any large increases.”

Ford wants to upgrade the buying experience to emulate Bayerische Motoren Werke AG, Lexus and Daimler AG’s Mercedes- Benz. At the dealer meeting, Ford will ask the Lincoln dealers to renovate showrooms and improve customer service, said Christian Bokich, a company spokesman.

“Our goal is to set up our dealers so they can succeed wildly and also can treat our customers well,” he said. “Dealers will decide if they’re interested in providing the next level of experience. It will be a question of the market as to whether certain dealers will decide to stay with us.”

Costly Upgrades

Amabile said it cost more than $1 million to upgrade his combined Ford and Lincoln showroom in 2008. He estimates the renovations Ford is seeking will cost dealers $500,000 to $2 million.

Lincoln’s 264 stand-alone dealers -- those who don’t also have a Ford showroom -- will find it hardest to afford additional investments in renovations and training, said Jeff Schuster, an auto analyst with J.D. Power & Associates in Troy, Michigan.

“Dealers will feel like, ‘At the same time you’ve cut my volume in half, you’re asking me to invest’,” Schuster said. “I can see some push-back happening.”

At 1,187 dealers, Lincoln has more than five times more showrooms than Lexus, which has 230, Grant Thornton’s Melville said. Lexus sold 145,490 cars and trucks this year through August, almost tripling Lincoln’s 55,776 vehicles sold.

“That’s probably not a sustainable level of sales per dealer with the loss of Mercury,” Schuster said. “Ford does have plans to expand and grow the Lincoln brand. But that’s not something that happens overnight, and dealers have bills to pay.”

LINK:

http://www.bloomberg.com/news/2010-09-24/lincoln-dealers-may-bail-rather-than-revamp-showrooms-for-two-sales-a-week.html

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LINCOLN LOOKING TO CUT 40 PERCENT OF METRO DEALERS

By Drew Johnson

In a bid to move a few rungs up the luxury car ladder, Ford is reportedly planning to cut at least 200 of its Lincoln dealerships. The cuts will mainly focus on Lincoln’s major metropolitan stores.

Spurred by a combination of a new direction to take on top luxury brands and the death of Mercury, Lincoln is expected to officially make the announcement at its October 4 dealer meeting. Lincoln dealers in major metro areas will be the main focus of the plan, with up to 40 percent of those stores expected to be eliminated.

"The future direction of the Lincoln ownership experience has been charted on a joint basis between Ford Motor and select dealer representatives," spokesman Christian Bokich told Automotive News. "It is important that Lincoln dealers are the first to hear about this information from the company."

Lincoln currently has 1,221 U.S. stores – including 276 stand-along Lincoln-Mercury dealers – which is well above the luxury average. In comparison, Lexus – the leading luxury brand in the United States – has just 230 stores. BMW and Mercedes-Benz both have around 350 U.S. stores.

But despite its high number of retail outlets, Lincoln ranks eighth among luxury brands in the United Sates, and is currently on track to sell about 83,000 cars in 2010. Lexus, meanwhile, is on pace for more than 217,000 sales.

As a result of those figures, Lincoln dealers sell fewer cars per outlet than any other luxury brand. The average Lincoln store will sell 67 vehicles in a year, compared to 80 for Cadillac, 546 for Mercedes and 947 for Lexus. Lincoln is hopeful the dealer cuts will make the brand more profitable, and also deliver a better buying experience for the customer.

link:

http://www.leftlanenews.com/lincoln-looking-to-cut-40-percent-of-metro-dealers.html

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Lincoln cuts seen as key to competing against Lexus, BMW, Mercedes

Dealers fight one another for business

BY BRENT SNAVELY

FREE PRESS BUSINESS WRITER

To compete effectively against Lexus, BMW and Mercedes, Lincoln must reduce its total number of dealers, experts and Lincoln dealers say.

Ford has 1,187 dealers that sell the Lincoln brand in the U.S. -- five times more than Toyota's Lexus, the country's top-selling luxury brand.

• MORE: Mulally: Ford model lineup may go to 20

Lincoln sales are up 4.7% for the year, less than the industry's 8.4% gain, and it remains a small player in the luxury market.

"They would like to have some showroom consolidation," said Michael Stanford, vice president of Varsity Lincoln Mercury in Novi.

Ford announced in June that it would discontinue production of the 71-year-old Mercury brand, long sandwiched between Ford and Lincoln, this fall. Ford said most Mercury buyers will be willing to buy a Ford or a Lincoln.

Ford had 3,477 dealers in all at the end of July. Though most dealers that sell Lincoln also have sold Mercury and Ford brand vehicles, 264 dealers sell only Lincoln and Mercury.

Without Mercury, those dealerships need to completely re-evaluate their business model, Stanford said. That's because they depend on Mercury for 40% to 60% of their sales.

Even some of the best Lincoln Mercury dealers may not be able to survive as stand-alone Lincoln dealers because there simply may not be enough wealthy buyers in their area to generate enough annual sales.

"There are too many dealers," said Ryan Kolb, operations manager for Hines Park Lincoln Mercury in Plymouth. "In order for the dealers to be strong, we can't be competing with each other; we have to be competing with other brands."

Ford has invited Lincoln dealers to Dearborn next week, and the trade publication Automotive News said Monday that Ford wants to eliminate about 200 dealers. Ford said it has not set a specific target.

"We expect dealer consolidation is going to be one of the effects of aligning Lincoln with its luxury customers," spokesman Christian Bokich said. "Part of the meeting is about, how do we align ourselves with our competitors and how do we align ourselves with our luxury customers?"

In 2009, Lincoln's 1,187 dealers sold about 5.8 Lincoln vehicles a month, while Lexus' 226 dealers sold about 80 cars per month. Meanwhile, BMW's 226 U.S. dealers sold about 48 cars per month, while Mercedes' 338 dealers sold about 45 per month.

Kolb said Hines' fiercest competition is other Lincoln dealers, rather than a nearby Cadillac dealer.

Earlier this month, Jim Farley, Ford's group vice president of global marketing, sales and service, said Ford would like to reduce its total number of dealers to 3,000. He didn't provide a time frame or details on how many stand-alone Lincoln Mercury dealers that would leave.

Bob Tasca Jr., a Rhode Island dealer who is chairman of the Lincoln Mercury dealer council, said Ford would likely ask many dealers to upgrade their showrooms. Some may decide they can't afford it.

"There will be dealers that will need to make decisions," Tasca said. "It may also make sense for some of them to do something different."

Ford has promised that it will introduce seven new or redesigned vehicles during the next four years, and a redesigned Lincoln MKX crossover was just launched, along with a hybrid version of the Lincoln MKZ midsize sedan.

But Kolb said it could take nearly two years for the next new Lincoln to arrive, and that will make it even more difficult to justify any additional showroom investments. "It's definitely going to hurt over the next couple of years until we get that new product," Kolb said.

In metro Detroit, there are about 15 Lincoln Mercury dealers; many of them relied on Mercury.

"I think some of the shakeout will be automatic," said John Youngblood, co-chairman of the automotive practice at Abbott Nicholson in Detroit. "Those dealers who have a high volume of their percentage from Mercury will not survive with Lincoln alone."

link:

http://www.freep.com/apps/pbcs.dll/article?AID=/20100928/BUSINESS0102/9280325/1331/Business01/Lincoln-cuts-seen-as-key-to-competing-against-Lexus-BMW-Mercedes&template=fullarticle

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Dealers anxiously await Lincoln plan

BY BRENT SNAVELY

FREE PRESS BUSINESS WRITER

Hundreds of Lincoln Mercury dealers eager to learn what the future might hold for their curtailed businesses streamed into the Hyatt Regency Dearborn on Monday. Ford, which announced plans in June to discontinue Mercury so it could devote more resources to Lincoln, has promised to launch seven new or redesigned Lincoln vehicles in the next four years.

Today, Ford plans to share more details about its strategy with dealers.

But several dealers said Monday that they are concerned because it could take up to two years before the new vehicles reach showrooms.

"It is going to be a leap of faith," said Mark Nemith, owner of Nemith Lincoln Mercury in Latham, N.Y., outside Albany. "You are banking on the fact that Ford is going to create a truly distinctive luxury brand."

There also is anxiety about Ford's desire to cut the number of Lincoln dealers and possible requirements for additional showroom investments.

Ford has 1,187 dealers that sell the Lincoln brand in the U.S., compared with 226 for Lexus, the top-selling luxury brand in the U.S.

"If they are going to size us like Lexus and Infiniti, then we only need 300 dealers," Nemith said. "And if they are going to require showrooms like Lexus and Infiniti, then we are looking at a huge investment."

Lincoln sales are up 6.8% for the year, but that's less than the industry's 10.3% gain. What's more, Mercury represented a disproportionate share of the sales volume for some Lincoln Mercury dealers.

Last month, Jim Farley, Ford's group vice president of global marketing, sales and service, said Ford would like to reduce its total number of dealers from 3,477 to 3,000 at the end of July.

Nemith and other dealers give Ford credit for working with dealers over a period of time to reduce the dealer base.

But as Ford tries to accelerate that process, it will likely face dealers who are reluctant to give up their franchises.

Read more: Dealers anxiously await Lincoln plan | freep.com | Detroit Free Press http://www.freep.com/article/20101005/BUSINESS01/10050338/1210/Dealers-anxiously-await-Lincoln-plan#ixzz11UR0cAXg

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Whatever they do I wish they would ditch that stupid whale face. On a flagship sedan what could they replace it with? Oh, I don't know...

4944550590_75f3ebf4b9.jpg

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Ford plans to trim Lincoln dealers

Alisa Priddle / The Detroit News

Dearborn — Ford Motor Co. plans to meet with each of its almost 1,200 Lincoln dealers individually during the next 100 days to plan their futures.

The Dearborn automaker will help each dealer decide whether to get out of business or make the investment needed to continue selling Lincoln vehicles in upgraded facilities without the extra volume from the discontinued Mercury brand.

Ford will not say how many dealers it expects to lose but stresses it needs to consolidate, especially in the 130 metropolitan markets where 80 percent of luxury buyers live.

Ford hopes to complete its consolidation and Lincoln brand overhaul within two years, said Mark Fields, Ford president of the Americas.

From The Detroit News: http://www.detnews.com/article/20101005/AUTO01/10050391/1148/auto01/Ford-plans-to-trim-Lincoln-dealers#ixzz11VO4CfQ2

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Ford outlines plans to shrink Lincoln dealer network

Jesse Snyder

and David Phillips

Automotive News -- October 5, 2010 - 12:01 am ET

DETROIT -- Ford Motor Co. said today it plans to dramatically reduce the number of Lincoln dealerships as part of a major overhaul of the lagging brand, with the bulk of the cuts coming from 500 stores in the nation's top 130 markets.

Ford has about 1,200 Lincoln stores, including 500 in the 130 biggest markets. Ford told dealers today those markets account for 85 percent of all luxury vehicle sales in the United States.

Ford executives are meeting this week with representatives from 700 U.S. Lincoln dealerships as part of the plan to overhaul the brand with new products, improved showrooms and enhanced customer service.

Lincoln also wants 700 dealers located outside major markets to improve showrooms.

Ford wants to revamp Lincoln and make it a viable competitor with luxury brands such as Lexus, BMW, Audi and Mercedes-Benz.

Ford didn't outline specific cuts or compensation packages today, but the automaker hopes to reduce as many as 200 Lincoln franchises, or 40 percent of showrooms in major metro markets, company sources have told Automotive News.

Raising Lincoln's game

“We have to do things differently than we have been doing,” Bob Tasca, a Rhode Island Lincoln dealer and head of the Lincoln Dealer Council, told reporters after the meeting. “If we keep doing what we have been doing, we will never be a luxury brand.

“We have too many dealers and many of them are not located in the right places,” said Tasca. “We all face a difficult decision. Some stand-alones won't make it. Some duals won't make it.”

Ford plans to hold two additional meetings with Lincoln dealers over the next 100 days as part of the process.

“We are asking dealers to decide with their head and their heart,” said Mark Fields, head of Ford's Americas unit. “It will be an emotional decision. It will be a financial decision.”

Lincoln's U.S. sales peaked at 231,660 in 1990, and the brand was No. 1 in U.S. luxury sales in 1998. Demand has fallen in recent years. In 2009, sales hit nearly 83,000.

Lincoln's U.S. sales are up 7 percent this year in an overall market that is up 10 percent. But the division still trails Lexus, BMW, Mercedes, Cadillac and others in luxury brand sales.

Ford plans to introduce seven new or redesigned Lincoln models beginning with the refreshed 2011 MKX crossover.

Another pickup?

At a meeting Monday, Ford showed dealers concept-stage images of some of the upcoming models but did not reveal specifics such as the size or the names of the vehicles under development.

Ford is developing a flagship, large sedan that harkens back to the Continental, dealers briefed on the plans told Reuters. And pickuptrucks.com reported today Lincoln is exploring whether to market a pickup again.

With the elimination of the Mercury brand, Ford intends to focus more resources on rebuilding Lincoln and encourage Lincoln dealers to upgrade showrooms and service facilities. It is also setting new dealer targets for customer service and satisfaction to elevate Lincoln.

Ken Czubay, Ford's vice president for U.S. marketing, sales and service, said today that less than 25 percent of Lincoln's current dealerships meet the future showroom, service and customer satisfaction requirements.

“It's very important to meet the expectations of luxury buyers,” said Tasca.

Lexus and other luxury brands have far fewer dealerships and -- when combined with higher brand sales -- more profitable dealers.

Lincoln has also struggled to attract younger buyers. The average Lincoln owner is almost 59 years old, compared with 48 for Volkswagen AG's Audi brand, according to industry tracking site TrueCar.com

“The biggest problem is the brand identity itself,” TrueCar analyst Jesse Toprak said.

“A lot of people have the image of the car that your grandpa owned.”

Ford has divested Jaguar, Land Rover, Aston Martin and Volvo over the past few years to concentrate on its mass-market Ford brand.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101005/RETAIL07/101009946/1256#ixzz11VQgxmlB

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Ford plans to axe more than 300 Lincoln dealers

01:32 PM

Ford plans to eliminate more than a third of its 1,100 Lincoln dealers as part of its effort to revive the luxury brand, according to the Associated Press, which talked to a dealer who attended a closed-door meeting Tuesday.

Ford revealed the plan to its 1,100 Lincoln dealers at the meeting in Dearborn, Mich.

The AP talked to Ramon Alvarez, who owns a Lincoln, Mercury and Jaguar dealership in Riverside, Calif. He said Ford has identified 130 market areas where the brand has the best chance. It plans to consolidate its dealerships into those areas.

Just as it did with its Ford brand, Ford Motor is trying to reduce its dealerships so that those surviving will be able to invest more in their operations, easier to do when they have higher sales volumes. Foreign brands like Lexus and BMW have far fewer dealers, often with far nicer facilities.

Lincoln's sales peaked in 1990 at 231,660, according to Ward's AutoInfoBank. Last year, Ford sold 82,847 vehicles as buyers looked to other luxury brands like Lexus and BMW.

Ford is under pressure from dealers to replace the volume they'll lose when the company phases out its long-struggling Mercury brand at the end of this year.

link:

http://content.usatoday.com/communities/driveon/post/2010/10/ford-plans-to-axe-more-than-300-lincoln-dealers/1

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Ford to meet Lincoln dealers on reduction plans

BY BRENT SNAVELY

FREE PRESS BUSINESS WRITER

Ford said today it plans to meet at least twice with all of its dealers over next several months as it works to reduce its dealership network and concentrate its effort to improve the Lincoln brand in the top 130 major metropolitan markets.

The automaker has about 500 dealers in those markets and told dealers it met with over the past two days that hopes to reduce its dealership count by about one-third – a message that was difficult but necessary to deliver, Ford executives said.

“Our message was pretty simple, we are full committed to transforming Lincoln into a world class luxury brand with compelling vehicles and also a consumer experience to match,” said Mark Fields, Ford’s president of the Americas.

Fields said Ford’s effort to revive Lincoln will be concentrated in the larger markets because nearly 90% of all luxury buyers live in those areas.

Ford announced plans in June to discontinue its 71-year-old Mercury brand so it could dedicate more marketing and product development resources to Lincoln, and said it plans to launch seven new or redesigned vehicles over the next four years.

Lincoln sales are up 6.8% for the year, but that's less than the industry's 10.3% gain. What's more, Mercury represented a disproportionate share of the sales volume for some Lincoln Mercury dealers.

Ford, which also has nearly 700 dealers in small towns and rural areas, hopes dealers will make decisions by fall of 2011 about whether or not they want to remain a Lincoln dealer.

“Very simply, there are too many dealers, and many of them are not even located properly,” said Bob Tasca, Jr., a dealer in Rhode Island who also is the chairman of the Lincoln-Mercury dealer.

Ford has a total 1,187 dealers that sell the Lincoln brand in the U.S., compared with 226 for Lexus, the top-selling luxury brand in the U.S.

Ken Czubay, Ford’s vice president of U.S. marketing, sales and service, said the key to transforming Lincoln into a brand that can better compete with other luxury brands is to improve volume of cars that each dealer sells annually.

In 2009, Lincoln’s 1,187 dealers sold about 5.8 Lincoln vehicles a month, while Lexus' 226 dealers sold about 80 cars per month. Meanwhile, BMW's 226 U.S. dealers sold about 48 cars per month, while Mercedes' 338 dealers sold about 45 per month.

“We need to make sure that our dealers are competitive in that regard,” Fields said.

Czubay said Ford will offer dealers financial incentives to either relinquish their franchise or stay with Ford. Ford declined to provide specifics, saying it will vary by dealership.

“It was a very difficult meeting. Obviously it affects a lot of lives out there,” Tasca said. “But I think all the dealers realize we have to do things differently.”

Read more: Ford to meet Lincoln dealers on reduction plans | freep.com | Detroit Free Press http://www.freep.com/article/20101005/BUSINESS0102/101005036/1331/business01/Ford-Lincoln-dealers-in-metro-areas-to-be-cut#ixzz11Wa1Q0Vb

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Ford to trim Lincoln dealerships

Alisa Priddle / The Detroit News

Dearborn — Ford Motor Co. wants to shrink the number of Lincoln dealers in the top 130 metro markets by 35 percent — about 175 dealers — to compete more directly with foreign luxury brands.

About 730 Lincoln dealers and another 170 dealer representatives gathered in Dearborn for a two-day meeting that ended Tuesday. Dealers heard Ford’s vision for the brand and the investment they will be required to make in their facilities and personnel — especially in big cities, where such luxury brands as Lexus, Audi and Mercedes-Benz are concentrated.

The foreign luxury brands have about 350 U.S. dealers each, compared with 1,200 for domestic luxury marques Lincoln and Cadillac.

“It was a very difficult meeting,” said Bob Tasca Jr., a Rhode Island dealer and chairman of the Lincoln Mercury Dealer Council. Business lives are on the line, he said, but dealers realize they have to change to compete.

“We are not successful the way we are doing it,” Tasca said. “There are too many dealers and a lot of them are not located properly. Some will make it and some will not.”

With the demise of the Mercury brand at year’s end and the selling off of the Jaguar, Land Rover, Aston Martin and Volvo brands in recent years, Ford is renewing its commitment to two brands: Ford for volume and Lincoln as the step-up luxury brand.

Armed with an overview of the luxury market and Ford’s vision of where Lincoln fits, each dealer will meet twice with field representatives by the end of January to help determine whether to continue selling the brand, drop Lincoln and focus on Ford (if they have both franchises), or let Ford buy them out.

Lincoln will get seven new or upgraded products over the next four years but the automaker wants dealers to provide an upscale consumer experience within two years.

The necessary investment will vary by dealer, but “they need to invest differently than in the past,” said Mark Fields, Ford’s president of the Americas.

Less than 25 percent of Lincoln dealers are at the level Ford wants, said Ken Czubay, Ford vice president of U.S. sales, marketing and service.

The automaker expects some rural dealers to fold as a result of the new demands and Mercury’s demise, but the real focus is on consolidation in the 130 largest markets where 88 percent of luxury buyers live.

There are 500 Lincoln dealers in these metro markets, which would mean about 175 are targeted to go.

Ford will not force out any dealers, and will accept whatever number of facilities there are after the shakeout, Fields said.

Randy Berlin, director with Urban Science, Detroit-based dealer consultants, said Ford is pursuing a good strategy to align itself with the other luxury brands in the largest markets, while keeping the incremental sales in smaller cities that foreign brands never entered. Rural dealers provide incremental business, he said.

“We were transparent about where the network needs to be and what we need to deliver in terms of service,” said Jim Farley, group vice president of global sales, marketing and service.

The dealers who continue to sell Lincoln must create a luxury experience and ensure services such as car washes and daily loaner cars, Farley said.

Ford Credit can help with the dealers’ investments as they improve the look and performance of their operations.

But rural dealers will have to decide if the investment is worth it with the loss of Mercury volume, Czubay said.

Vince Trasatti Jr.’s East West Line Lincoln Mercury dealership in New Carrollton, Md., is part of the Washington, D.C., metro area, which is targeted for consolidation.

“I don’t know if I can identify all the specifics of the investment yet,” he said, noting it involves changes in facilities, as well as having the right people to deliver the desired consumer experience.

Still, Trasatti said, “it’s a great thing to have this laser focus on the Lincoln brand. It’s no secret the company got distracted with other brands but those distractions are gone.”

Tasca agreed. “We don’t have competition within the company anymore.”

Berlin said other luxury brands have fewer dealers, so there is less competition among them, and that results in a higher profit margin.

“I think Lincoln has a legitimate chance, but product, marketing and retail are all critically important to success,” Berlin said.

From The Detroit News: http://detnews.com/article/20101006/AUTO01/10060384/1148/auto01/Ford-to-trim-Lincoln-dealerships#ixzz11aUS8OsN

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Ford to cut Lincoln dealers by 35%

Automaker aims to reduce stores in metro markets, upgrade them

BY BRENT SNAVELY

FREE PRESS BUSINESS WRITER

Although Lincoln dealers expected Ford officials to detail a reduction in retail outlets during a meeting in Dearborn on Tuesday, many said the news was still difficult to take: 35%, or 175 of 500 metro stores nationwide, by the end of next year.

"It was a somber day," said Larry Taylor, who purchased the only Lincoln Mercury dealership near Dayton, Ohio, last spring. "I'm secure. But there are some guys who have had stores for 50, 60 years who are going to have to give that up."

Mark Fields, Ford's president of the Americas, said that Ford needs to reduce dealerships in 130 metro markets "to be competitive" because that's where 90% of all luxury buyers live.

Ford will give some dealers until the fall of 2011 to consider their options and noted it would offer some payment to dealers who relinquish their franchise.

"We are fully committed to transforming Lincoln into a world-class luxury brand," Fields said.

In June, Ford announced plans to discontinue its 71-year-old Mercury brand so it could dedicate more marketing and product development resources to Lincoln, which plans to launch seven new or redesigned vehicles over the next four years.

But without Mercury, Ford must shrink its number of dealerships so that the remaining dealers are profitable enough to compete against Lexus, BMW and Mercedes.

In 2009, Lincoln's 1,187 dealers sold about 5.8 Lincoln vehicles a month, while Lexus' 226 dealers sold about 80 cars per month. Lincoln sales are up 6.8% for the year, but that's less than the industry's 10.3% gain.

Ford also wants to reduce its total number of dealers in smaller towns and rural areas, but was less specific about its goal for those dealers.

Pat Biddle, owner of Kline Motors in Winfield, Kan., said Ford told dealers it no longer wants F-Series pickups to be repaired in the same service bays as Lincolns.

"They want it to be a luxury atmosphere," Biddle said. "But our F-250 buyers are also Lincoln owners."

Ken Czubay, Ford's vice president of U.S. marketing, sales and service, said Ford will meet with each of its Lincoln dealers twice by the end of the year to discuss how much they would need to spend on upgrades.

Czubay estimated that fewer than 25% of dealers meet the new standards.

Some dealers said it is difficult to justify additional expenditures, in part because it may take as much as two years before the new cars arrive.

"One of my concerns is are they going to produce the product to compete against Lexus and Audi," Biddle said.

Bob Tasca Jr., a dealer in Rhode Island who also is chairman of the Lincoln Mercury dealer council, said the process Ford is using is orderly and respectful.

"It was a very difficult meeting," Tasca said. "Very simply, there are too many dealers and many are not even located properly. They're going to have to have a reality check if they're going to invest in Lincoln."

Read more: Ford to cut Lincoln dealers by 35% | freep.com | Detroit Free Press http://www.freep.com/article/20101006/BUSINESS01/10060334/1331/business01/Ford-to-cut-Lincoln-dealers-by-35#ixzz11abRJxAf

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