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Mercury C557
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Discussion Starter #1
With Lincoln, Ford Isn't in the Lap of Luxury - BusinessWeek
After its sale of Land Rover, Jaguar, and Volvo, Ford banks on Lincoln

By Keith Naughton
May 6, 2010, 5:00PM EST
Business is booming in Jack Kain's Ford (F) dealership in London, Ky. Not so much, though, at his Lincoln showroom, where new models like the hulking MKT wagon go begging for buyers. "It would be very, very tough for us to make it if we just had Lincoln," says Kain, who owns two Ford stores and one Lincoln outlet in Kentucky horse country.

Ford is on a roll, as mainstream car buyers embrace the American brand that didn't go bankrupt. Now that Chief Executive Officer Alan Mulally is unloading Volvo, however, Ford's upscale ambitions are riding on Lincoln. Sales at the unit are down 64% from its 1990 peak and buyers average an industry-high age of 62, according to J.D. Power and Associates (MHP). "To younger generations, that's grandpa's car," says auto analyst Jesse Toprak of researcher TrueCar, "That doesn't help when you're going up against Mercedes and BMW."

Ford is trying to give Lincoln a hip implant. It's outfitted four new models with more-dramatic design and installed high-tech features including a voice-activated phone and entertainment system. To boost sales, Ford last week gave Lincoln its own marketing manager for the first time in nearly two years.

The new look isn't helping much. Lincoln's U.S. market share is stuck at a paltry 0.8% this year, while the Ford nameplate grew at its fastest rate since 1977. Lincoln isn't even outselling the Mercury brand, which Ford is starving of new models and marketing. Lincoln is still defined by the black Town Car that has ferried generations of business travelers to the airport, says analyst John Wolkonowicz of IHS Global Insight. "Ford doesn't have a true luxury brand anymore," he says. "All the Lincolns are nothing more than gussied-up Fords."

Ford long ignored Lincoln, in part because over the last two decades it bought a stable of European luxury brands that seemed to hold more potential: Jaguar, Land Rover, Aston Martin, and Volvo. But shortly after arriving from Boeing (BA) in late 2006, Mulally began dismantling what he called Ford's "house of brands," selling off the European lines at fire sale prices. The idea was to first fix its largest franchise, the middle-market Ford brand, which had become so dependent on sales of big SUVs and pickup trucks that the automaker lost $30 billion from 2006 through 2008. Lincoln, whose models are based on Ford's mechanical platforms and built in Ford plants, would be kept and fixed later.

Lincoln is sold only in North America. That leaves Ford at a disadvantage to other major automakers, which take luxury lines global as a source of prestige—and profits. The cache of an international luxury brand can command margins more than twice those of mainstream models. That's why Germany's Volkswagen sells Audi cars worldwide and Japan's Toyota (TM) has built Lexus into the top-selling U.S. premium line. Even post-bankruptcy General Motors is making a renewed push into Europe, Russia, and China with Cadillac.

Taking a luxury brand abroad also lets automakers tap faster-growing foreign markets. That's why TrueCar's Toprak thinks Ford is "leaving money on the table" by not taking Lincoln overseas. "They really need a global luxury brand because 80% of the growth in vehicle sales in the next five years will come from outside the U.S.," he says.

Still, Ford thinks it has good reason to keep Lincoln at home: "Our track record operating global premium brands has not been stellar," says Chief Financial Officer Lewis Booth.

Ford is retiring the Town Car next year and launching new models aimed at younger buyers like the MKX sport wagon this summer. It's infusing Lincoln advertising with Gen X-friendly music from the 1980s. And Lincoln dealers are being trained to offer the high-touch service given by some European manufacturers, said Jim Farley, Ford's global marketing chief and former head of Lexus. "There's a tremendous opportunity here in North America to get Lincoln right," he says.

Why Lincoln Lags Luxe
Average Age of Owner: 62
Median Income: $129,656
4-Year College Degree: 21.90%

Average Age of Owner: 49
Median Income: $1698,289
4-Year College Degree: 29.07%

Average Age of Owner: 56
Median Income: $141,745
4-Year College Degree: 26.45%

Average Age of Owner: 53
Median Income: $174,558
4-Year College Degree: 27.74%

Average Age of Owner: 49
Median Income: $183,601
4-Year College Degree: 31.66%

Average Age of Owner: 62
Median Income: $113,782
4-Year College Degree: 25.47%
The bottom line: Ford dumped its luxe brands to focus on its core vehicles. Now it's left with aging Lincoln just as luxury demand is set to take off.

Mercury C557
22,734 Posts
Discussion Starter #2
^ mainly posted this because I'm sort of a Lincoln-watchdog

(since THAT Half of Lincoln-MERCURY has gotten almost All the attention in not-so-recent memory :mad: )
as such want to point out a number of disagreements with this "piece"
- emphasize that Lincoln isN'T aging as a Brand - so much NEW! stuff
- that the new look IS succeeding - attention/perception is drastically improved
- the time-scale of the article ("the last 2 decades") is overkill for the market All Lux Brands are aiming for: the up-&-coming customers that will lower the avg-age AND lead to long(er) term success

All that said,
I'm no clearer on the long-range plans for the non-Ford part of FML than I was back at the start of 2005 when I started ranting about what Fomoco COULD achieve with my favorite M part...

...gotta believe the answers will appear before another 5 years go by
(& Of Course, still believe Mercury has more un-exploited potential than any other Brand on the planet!!!

5,933 Posts
the new image is working... I had a project in class to find a successful ad for anything and get stats on it. I picked the ad from when the LS came out called perceptions. I started off by saying Lincoln has an image of being a large vehicle. My professor asked the class if they agreed and most said that the old ones are but the new Lincolns are 'sick'

Now Ford really needs to start making Lincoln DIFFERENT and give Mercury some room to breath.

244 Posts
The decline of both Mercury and Lincoln is due to lack of Ford attention to these brands. I don't think either of these brands making a major comeback anytime soon. Ford is killing off its RWD. These cars needed a major makeover 5 years ago. Now, Merc and Lincoln will suffer without a new RWD car. I don't like of front end of the MKS or MKZ cars. Maybe try to copy the front ends of the '56 or '57 Lincolns. Ford is definitely not helping Merc at present.
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