the LINCOLN 12-STEP program: #1 & 2... - Ford Inside News Community
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post #1 of 11 (permalink) Old 04-08-2018, 04:27 PM Thread Starter
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the LINCOLN 12-STEP program: #1 & 2...

subtitle »» 1st step?: reduce 'fleet' sales? ...WUT?

via Lincoln Cutting Fleet Business as it Focuses on Residuals
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- Nick Saporito - Apr 8, 2018


Part of Lincoln’s revitalization plan is bringing a bit of short-term pain for the luxury brand. Ford’s luxury division is methodically cutting several of its sales channels, including fleet sales, to produce vehicle residual values, causing some short-term sales loss.

In the course of the last year Lincoln has cut sales to daily rental companies, a common cut from brands wishing to boost residuals. However, Lincoln has taken it a bit further by restricting Lincoln sales both internally and externally to commercial customers. It sounds like it is difficult for Ford employees to even get a Lincoln as a company car.

Lincoln’s director of marketing, sales and service, Robert Parker, tells Automotive News...

- - - - - - -


Lincoln dials back fleet business
'Deliberate efforts' to protect residual values

AutomotiveNews
- Michael Martinez - April 8, 2018


NEW YORK — Lincoln has quietly curtailed its fleet business this year to protect residual values and follow through on Ford Motor Co. CEO Jim Hackett's orders to improve the company's operational fitness, according to executives.

The luxury brand, whose Town Car and Continental have long been associated with airport and hotel livery services, will continue selling to those commercial businesses, Robert Parker, Lincoln's director of marketing, sales and service, told Automotive News. But the brand has cut deliveries to daily rental companies such as Hertz and Avis and has dialed back on providing company cars, both internally and to other businesses, as part of its commercial fleet sales, Parker said.
(*)
"Those are very deliberate efforts to really focus on residual values as our new products come out," Parker said on the sidelines of the New York auto show. "What happens is those cars come back in six to 12 months. That's problematic on our residual values because that's when all the depreciation occurs. The longer they stay out, the better."

Lincoln's daily rental sales are down 27 percent through the first quarter, according to Ford data.

Last year, daily rental represented 9 percent of the company's overall sales. The brand's commercial fleet business represented 2 percent of sales, while sales to government agencies is virtually nonexistent.

"Fleet hasn't been a huge part of our business," Parker said. "But it's not insignificant."

The move to protect the brand's residual values is all the more important as officials see a rise in leasing rates as millennials opt for monthly payments over outright purchases, Parker said.

The fleet cutback, expected to pay off in the long term, has caused short-term pain.

Lincoln sales fell 2.1 percent in March and are down 17 percent through the first three months of the year, compared with a 2.9 percent rise for the overall luxury segment, according to the Automotive News Data Center. That's in spite of strong demand for the redesigned Navigator SUV.

But Parker argues that the underlying numbers are healthy.

Per-vehicle incentive spending in the first quarter declined $280 from the same period a year ago for Lincoln but rose about $790 for the overall luxury segment, Ford said.

Lincoln's average transaction price was up $6,200 in the first quarter, compared with a $460 rise for the luxury segment, according to Ford.

And more help should be on the way. The freshened MKX crossover, renamed the Nautilus, goes on sale this spring, followed by a freshened MKC crossover. The three-row Aviator will follow in 2019.

And Navigators continue to sell nearly as fast as the company can build them. Retail sales in March grew an eye-popping 101.6 percent from a year earlier to 1,711, and 80 percent of sales were of the top two most expensive trim levels. Transaction prices rose $25,600 from the same period a year ago, Ford said.

Beyond the U.S., Lincoln chief Joy Falotico said the brand is poised for its fourth consecutive year of growth in China, which should help its quest to reach 300,000 global sales by the end of the decade.

"The industry got off to a slow start, but we have a lot of new vehicles coming," Falotico told Automotive News. "It's really important for us to work on residual values. As we build up the brand, we're going to bring up the brand values with it."



(*) this goes against EVERYthing I've ever read about rentals are worst while corporate sales are OK...
...also/afaik Livery sales, while ANTI-prestigious, have a very long turn-over

+ couldn't they only offer 3-year-Plus terms(incentives) for corporate? Or do they "pay cash"??
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post #2 of 11 (permalink) Old 04-08-2018, 07:46 PM
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Re: 1st step?: reduce 'fleet' sales? ...WUT?

Well that certainly explains the sales numbers the first 3 months.
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post #3 of 11 (permalink) Old 04-08-2018, 08:04 PM
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Re: 1st step?: reduce 'fleet' sales? ...WUT?

"And Navigators continue to sell nearly as fast as the company can build them. Retail sales in March grew an eye-popping 101.6 percent from a year earlier to 1,711, and 80 percent of sales were of the top two most expensive trim levels. "

I wonder just how many Navigators they can build weekly. If they are selling every one they have made for March and that was just over 1700 or about 425 per week(with some carryover from April). The 25% increase should bring that to about 500 weekly. Escalade sales are over 3200 for March, so it's doubtful that Navigator will challenge with sales numbers, but with higher sales price instead.
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post #4 of 11 (permalink) Old 04-08-2018, 11:12 PM
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Re: 1st step?: reduce 'fleet' sales? ...WUT?

Below is a brief discussion Andrew and I had in the February sales thread; I knew something was up with Lincoln's sales numbers!

When I said; "remember they've all got a new boss at Ford" I was implying that they might not do everything the same way they use to.......

So even though Lincoln's fleet numbers have not been very high, there has been a effort to reduce them even further, explaining at least part of the drop in sales through Q1.


Then I said; "Ford is essentially raising prices in the face of lower demand." Which fits rather snug with this tidbit, no?

Quote:
Per-vehicle incentive spending in the first quarter declined $280 from the same period a year ago for Lincoln but rose about $790 for the overall luxury segment, Ford said.

------------------------------------------

https://www.fordinsidenews.com/forums...018-sales.html

Quote:
Originally Posted by Andrew L View Post
I was curious and looked at both my local Lincoln dealers to see if they were starting to discount due to the poor sales and they are only offering 1k off at both locations.
Quote:
Originally Posted by Ed753 View Post
Demand is slowing, and they are not chasing sales, this takes knowing your customers, the market and courage (remember they've all got a new boss at Ford)

If you "know" you've got 100 sales in the bag at a given price, and lowering all 100 sales 10% gain you 10 more sales, your revenue is almost the same and your costs (110 vs 100 cars) goes up.

Ford is essentially raising prices in the face of lower demand.
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post #5 of 11 (permalink) Old 04-09-2018, 10:44 AM
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Re: 1st step?: reduce 'fleet' sales? ...WUT?

Quote:
Originally Posted by Bloggin View Post
"And Navigators continue to sell nearly as fast as the company can build them. Retail sales in March grew an eye-popping 101.6 percent from a year earlier to 1,711, and 80 percent of sales were of the top two most expensive trim levels. "

I wonder just how many Navigators they can build weekly. If they are selling every one they have made for March and that was just over 1700 or about 425 per week(with some carryover from April). The 25% increase should bring that to about 500 weekly. Escalade sales are over 3200 for March, so it's doubtful that Navigator will challenge with sales numbers, but with higher sales price instead.
It would be a lofty goal to outsell the Escalade, but I think Lincoln is more interested in making as much profit as it can, with the production limits it has.
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post #6 of 11 (permalink) Old 04-09-2018, 04:38 PM
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Re: 1st step?: reduce 'fleet' sales? ...WUT?

Quote:
Originally Posted by 2b2 View Post
And Navigators continue to sell nearly as fast as the company can build them. Retail sales in March grew an eye-popping 101.6 percent from a year earlier to 1,711, and 80 percent of sales were of the top two most expensive trim levels. Transaction prices rose $25,600 from the same period a year ago, Ford said.
If Lincoln's going for ATP's, They need to *only* sell the top two levels. Some of that 20% would move up to them, and many others could be pointed to a well-equipped Expedition.

Improving residuals should include taking cheap used Lincolns out of the equation by not offering cheap new Lincolns.
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post #7 of 11 (permalink) Old 04-09-2018, 07:24 PM
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Re: 1st step?: reduce 'fleet' sales? ...WUT?

No more bait-&-switch. Eliminate base model & its inviting MSRP; offer only Black, Red, Blue, Yacht, Lake Tahoe, Vail, Davos label Navis.
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post #8 of 11 (permalink) Old 04-12-2018, 03:05 PM Thread Starter
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2nd step?: the LINCOLN 12-STEP program?

thinking this thread is turning into being about -s-l-o-w-l-y- disclosing their GAME PLAN...
( might be hard knowing WHAT to post about STEP 2 » at first -- sorry it's looong )

Lincoln Planning Five New Vehicles in China
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- Nick Saporito - April 12, 2018


Lincoln plans to build five new vehicles in China by 2022. The plans are in an effort for Ford Motor Company's luxury brand to catch up to rivals in the world's largest auto market.

Thus far Ford has only confirmed plans to produce a new SUV in China under the Lincoln brand by the end of 2019. Although the nameplate of the SUV has not been confirmed, it is widely expected to be the all-new Lincoln Aviator, which is expected to launch next year.

Beyond the Aviator, sources have confirmed to Reuters...

- - - - - - -

Ford to ramp up Lincoln rollout in China in bid to catch rivals
Reuters
- Paul Lienert, Norihiko Shirouzu - APRIL 11, 2018 / UPDATED


DETROIT/BEIJING (Reuters) - Ford Motor Co’s (F.N) premium Lincoln brand plans to build as many as five new vehicles in China by 2022, according to two U.S. sources, in a move to expand sales in the world’s largest vehicle market that would also blunt the impact of trade U.S-China trade spats.

Ford has said it plans to build an all-new sport utility vehicle in China by the end of 2019, however the company has not detailed future production plans for the Lincoln brand in China beyond that.

“Our localization plans to support the China market are on track and will serve to further drive Lincoln’s growth in China,” Lincoln spokeswoman Angie Kozleski said. “Beyond that, it would be premature to discuss our future product and production plans or timing.”

Sources familiar with Ford’s production plans told Reuters the automaker now expects to begin building the new Lincoln Aviator in China in late 2019 or early 2020, along with replacements for the MKC compact crossover and the MKZ midsize sedan, followed in 2021 by the all-new Nautilus, which replaces the Lincoln MKX crossover.

A fifth model, a small coupe-like crossover, is tentatively slated for production in China in 2022, the sources said.

Ford has much to lose if the war of words over trade between China and U.S. President Donald Trump escalates into a full-blown tariff war. Last year, it shipped about 80,000 vehicles to China from North America, more than half of them Lincolns to support the brand’s growth.

All Lincoln vehicles that Ford now sells in China are brought in from North America.

Even if China does reduce its 25 percent tariff on imported vehicles - as Chinese President Xi Jinping promised on Tuesday - it is not clear that would mean a big, long-term increase in Fords and Lincolns made in U.S. factories heading to Chinese showrooms.

- - - - - - -

Lincoln Planning Five New Models for China in Bid to Catch Rivals
China destined to become brand’s top market, said new Lincoln chief. (DUH)

TheDetroitBureau - Paul A. Eisenstein - Apr.12, 2018


...yada-yada...comments made to TheDetroitBureau.com by Lincoln’s new boss, Joy Falotico, who said...yada-yada...

...Among the products that are coming for Lincoln are:

• The 2019 Aviator, which replaces the largely ignored MKT utility vehicle. It will debut in the U.S. and then move to China, with the vehicle produced locally;
• A replacement for the compact MKC crossover which has been one of the brand’s most successful new U.S. editions in years. By the time it reaches China it is expected to adopt a more traditional name, Lincoln abandoning its unsuccessful alpha naming strategy;
• A new version of the MKX, now being updated for the U.S. and renamed Nautilus;
• A replacement for the midsize MKZ sedan, which will also get a new name...

...Lincoln was a latecomer to the Chinese market, launching there only in 2015, and initially through just a handful of dealer. But it has been rapidly expanding its retail network. Sales tripled in 2016 and have continued to grow at a fast pace, even as Chinese demand for Ford-branded products has unexpectedly slowed. Lincoln saw a 66% jump in 2017, and a 60% year-over-year increase in February 2018, the most recent month for which numbers are available.

Even with that rapid growth, Lincoln sold just 54,124 vehicles in China last year, less than a third of the 175,489 vehicles sold there by Cadillac. And it lagged even further behind key German luxury brands like market leader Audi.

One reason why it is struggling to catch up is the reality that all Lincoln models currently are produced in the U.S., while most of its key competitors, including Cadillac, have set up major production bases in China. A total of 17,753 Lincoln MKC crossovers were shipped to China in 2017, according to LMC Automotive, making it third-highest among U.S. vehicle exports to that country. The big Continental sedan was 17th on the list, with shipments of 4,927 vehicles last year...

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post #9 of 11 (permalink) Old 04-13-2018, 09:49 AM
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Re: the LINCOLN 12-STEP program: #1 & 2...

New vehicles, less rental sales, better ATP, better resale=better lease rates...not bad at all.
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post #10 of 11 (permalink) Old 04-17-2018, 12:08 AM Thread Starter
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Re: the LINCOLN 12-STEP program: #1 & 2... 3?

purely a hunch based on watching Nightly Business News
& the latest CEO scandal = WPP (advertising), rang a bell = Ford has used them heavily...

Martin Sorrell steps down as ceo of advertising giant WPP
WashingtonPost


/

http://money.cnn.com/2018/03/01/inve...res/index.html

http://www.adweek.com/agencyspy/ford...pheaval/143960

http://adage.com/article/cmo-strateg...ations/312157/

could STEP 3 be a new campaign? & didn't Joy Falotico take over some marketing duties??


edit- just saw on tv - guess who's put up a dozen new vids in the past week?

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