Ford maybe planning to follow in GM’s footsteps and put the Lincoln luxury brand into production in the Chinese market to take advantage of a booming luxury segment that has so far been untapped by the blue oval.

GM put the Cadillac SLS into production with JV partner SAIC in the Chinese market, and also imported other models to fill the Cadillac dealerships. Cadillac has performed well in China with 1624 cars being delivered to consumers in august alone, which is an increase of 178% over the same period a year earlier, and Cadillac have seen sales increase of 157% over the first 8 months of the year. End of year Cadillac sales are expected to reach 10,445 units in 2010 in China.

Lincoln is so far sold only in American spheres of influence and certain middle eastern markets, it has yet to enter the European or Asian markets (not including South Korea) but in 2008 Ford’s CEO announced that Lincoln would go world wide yet again. Even in the US market, Lincoln is struggling against Cadillac, in August Lincoln saw sales of 6428 vehicles whilst Cadillac sold 12689.

A source close to Ford expressed that Lincoln will be going after BMW and Mercedes in the Chinese market, and doesn’t consider Cadillac, Acura or Infiniti as being true competition to their vehicles.

It will not be easy for Ford to introduce the Lincoln brand into China, whilst the luxury segment is booming it only appears to be booming for the German Three (BMW, Mercedes, and Audi) but the Japanese Luxury Three (Infiniti, Acura and Lexus) seem to be getting the cold shoulder from Chinese consumers. In 2009 Lexus sold 33,000 vehicles, Infiniti sold 5000 and Acura sold just 3400.

It’s not entirely clear what Ford’s plans for Lincoln are, they could test the waters with imported models as they have so far done with the Navigator, or they could begin production of certain crossover models and sedans within their Chang’an-Ford JV over the next coming months. China Car Times believes that imports are more than likely, but the Chinese media are indicating that the Lincoln brand is going to be produced locally.

A source close to Ford expressed that Lincoln will be going after BMW and Mercedes in the Chinese market, and doesn’t consider Cadillac, Acura or Infiniti as being true competition to their vehicles.

Lincoln to ax 200 of its metro dealerships nationwide
By: Jamie LaReau September 27, 2010



(Crain's) — 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.