By on October 13, 2010

A few days ago Ford reported that 35 percent of the Lincoln dealers are superfluous and should be sent out to pasture – to avoid the word “cull.” The metro areas appear to have a particular overabundance of Lincoln dealers. According to Mark Fields, President of Ford Americas, this is where “the efficiencies” need to come from. The news didn’t go down too well. The Freep quoted one dealer. “It was a somber day,” said Larry Taylor, Lincoln-Mercury dealer near Dayton, Ohio, “I’m secure. But there are some guys who have had a store for 50, 60 years who are going to have to give that up.” Mark Fields, President of Ford Americas is adamant: “We are fully committed to transforming Lincoln into a world-class luxury brand.” Now Ford is upping the ante against uppity Lincoln dealers.

Automotive News (sub) reports that Ford has issued an ultimatum to Lincoln dealers: Invest money in your dealerships to meet new service and dealership standards or kiss your franchise goodbye. Ford staffers will be sent to dealerships to talk to and negotiate upgrades which dealers need to make. If the dealer does not make the required changes, then they will have to take whatever severance package Lincoln will offer them. As Mark Fields puts it, “Dealers will decide”. It is estimated by Ford that about 25 percent of all Lincoln dealerships meet the standards that they want. What makes this decision even tougher for Lincoln dealers is that they have to commit money to improving their dealerships, while the return on investment doesn’t look that great. In September, 2010, Lincoln sold 7,510 units in the whole of the United States. Now compare that to Mercedes-Benz who, in the same period, sold 20,666 units. Or BMW, who sold 18,228. Or Audi, who sold 8,151 units. Or Lexus, who sold 16,948 units. Or Cadillac, who sold 12,620 units.  Even Acura sold more, at 10,720 units. So did Buick, they sold 12,875 units. And Infiniti, they sold 8,305 units. In short, Lincoln is one of the weakest luxury brands in the US market. It’s not that they don’t have too many dealers. They don’t have enough sales. And Ford is asking them to stump up more cash in order to make their dealerships meet new standards or risk getting cut. It’s not an attractive proposition.

How about something revolutionary: One Ford. Also in the dealer channel. People love multi-brand auto malls. No? Never mind.

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30 Comments on “Lincoln Dealers: An Endangered Species?...”


  • avatar
    TrailerTrash

    This depends.
    I am under the impression Ford has also given these dealers an inside look at what Ford is doing for the Lincoln line as well.
    If, as it seems to be reported, Lincoln is going to get a large push in investment and new. exciting cars…then Ford has a right to ask its dealers to play their part.

    Everything you mention above I am sure Ford is horribly aware of, and that is why this is happening.

    • 0 avatar
      JKC

      Agreed… there has to be suitable product for the dealers to sell. I like Fords (I own two of ‘em), but Lincolns have been nothing more than tarted up Fords for too many years.

  • avatar
    jpcavanaugh

    I think I see where Ford is going here.  Up until now, Ford has made the Devil’s bargain by pairing Lincoln to Mercury in the dealerships.  Mercury’s volume helped pay the overhead, but kept the place from being a true high-end dealer experience.  This is where Cadillac, Lexus, BMW and the others have had an advantage.

    If Ford is going to invest serious money into Lincoln, it needs Lincoln to be sold in high-end stand-alone dealers.  The problem now is that the dealers are being asked to ante-up right now, when sales and profits are low in the hope that things will be better in a few years.  This is a tough situation for the dealers.  Ford had better come through for them.

    I don’t think that the “one Ford” idea will work with the dealers.  The customer who should be buying a Lincoln will be asked to pay a lot of money, and needs to be provided with a luxurious dealership experience.  These customers will not want to rub elbows with F-150 or Fiesta buyers.

    • 0 avatar
      SVX pearlie

      What I don’t get is how Ford thinks Lincoln can be “world class” in the immediately foreseeable future.

      Caddy only recently got there, but it’s got a couple legitimate products (CTS and SRX) that really do stand with the best, along with the Escalade.

      Right now, Lincoln barely competes with Buick (which typically pairs with GMC for additional upscale volume). Or Acura / Infiniti, but without the distinctive sheetmetal of any of those brands in the retail space (the oft-liveried Town Car is the definitive Lincoln). Still, if Ford can shrink the Lincoln dealer base down to match the retail volume, I guess it’s a good thing going forward.

  • avatar

    they wrong. it’s not the storefronts, it’s the product and the marketing. cappucino machines are nice but it’s cupholders and styling that move metal, along with merchandising that effectively protrays positive self image. as to the dealers, just give prompt and reasonably priced service. expensive facility upgrades are not the answer.

    • 0 avatar
      ComfortablyNumb

      I agree, but if Ford wants someone to spend like a big shot, they need to treat them like one.  Ultimately it’s the car that matters, but you can’t ask someone to drop 60 large on a car and then put them in a cheap conference room chair to talk financing to a guy behind a steel desk.  Lexus, Infiniti, etc. showrooms are all marble and mahogany.  If Ford wants people to think Lincoln cares about their customers as much as those other companies do, you need to offer a similar experience.  Jim Farley knows what he’s doing.  Product is only part of the equation.

    • 0 avatar
      John Horner

      I disagree. Lexus’ sales would barely be half what they are had Toyota/Lexus not concentrated on creating an upscale dealer experience. Scion, for that matter, would be more successful if it were sold and serviced in an environment which feels like the raves Scion’s intended customers enjoy.
      Put another way, do you think Neiman Marcus could get the prices they get if their stores felt like an aging K-mart?
       

    • 0 avatar

      I donno Jim, I agree with you about 80%. You need a full experience to restore a brand. A lot of Lexus owners are repeat buyers because of the dealer experience, or so they say.  Bought my Mom a GS430 (CPO) from the San Antonio dealership. It’s the only Lexus dealer in the area, and the facility shows it. I hate to admit it, but I’d wanna go back to San Antonio just to get our car serviced there.

      Free Candy/Snacks/fresh fruit
      Stupid fast free WiFi
      Free Cappuccino Bar, stocked with every syrup flavor known to man
      Awesome lounge with expensive seats
      Impressive store for goofy stuff like Lexus-branded clothing.

      Then again, if MKF is telling Lincoln dealers to up the ate in this manner, that might be okay. But somehow I doubt it.

    • 0 avatar

      guys, I can take a Lincoln prospect and beat the deal by a couple hundred, put more in the trade, or offer a lower lease payment and steal the deal from any palatial edifice. furthermore, I will home delivery the unit and bypass the entire dealer experience which overjoys most consumers.

      people buy cars because of location and relationships far more often than facility. they get their wheels and go, they don’t live there. auto marketing executives today have never sold cars and are most usually successful because of hot product from engineers/stylists, or from being on the receiving end of a competitor’s failings.

    • 0 avatar
      Lokki

      You need a full experience to restore a brand. A lot of Lexus owners are repeat buyers because of the dealer experience, or so they say.

      OR

      they{‘re} wrong. it’s not the storefronts, it’s the product and the marketing

      Well, in my case, it’s a split decision:

      Here’s what sold me a string of Acura Integras in the 80′s - It was the nice chairs and the pampering along with  the feeling that somebody cared that my car actually got fixed. With my first Acura, I realized I didn’t mind if it broke because Acura was going to fix it, and I’d be tooling around in a nice loaner while they did. The first three I owned didn’t break often, and Acura  was really good about taking care of me when something did break

      However in 97 I bought an Acura and then dumped it after 10K miles and since  then I’ve had a series of BMW’s:

      The Acura product went significantly down-hill.  The cost cutting in the 97 compared to my earlier cars was blatant and shocking. Yeah the dealer experience was just as good but the cars were not. 

      So I left them for another brand where the cars were nicer (if not as reliable) and the dealer experience was (almost) as good. 

      So, I think in the end, I vote with Buickman. Quality product has to come first.  Given a roughly equal product ,dealer experience rules.  But a good dealer experience with a disappointing product equals adios.

    • 0 avatar

      Buickman is absolutely right, as usual.

    • 0 avatar
      jpcavanaugh

      Most buyers of luxury (or any) cars will never deal with a sales person of Buickman’s caliber and ability.  When we level the playing field with everyone having an average or slightly above average salesman, I still believe that most luxury car buyers want (need) to feel special. 
      I happen to believe that an $60 steak dinner is not really better than a $30 steak dinner.  But there are a lot of places that sell a lot of $60 steak dinners.  But none of those places have formica tables with ketchup bottles on them. 

      Ford’s idea will NEVER work without first class (or close to it) product.  But if there is a saleable product, an atmosphere that makes a customer feel pampered and allows them to brag to their friends about the bigshot treatment that their car dealer gives them will break a lot of ties.

    • 0 avatar
      rocketrodeo

      The storefront IS part of the marketing, and most definitely (and most importantly to lots of folks, including me) includes the service experience. Like Lokki, I bought a couple of ’80s Acuras, when the upscale-asian branding was just being initiated. It was a breath of fresh air.  The Detroit Three service experience was then, and largely continues to be, about as enjoyable as it is at the cut-rate brake and muffler shop and the Wal-Mart tire department.
      Ford has been exceeding expectations for a while now. Ford-branded cars are as luxurious as any Buicks I’ve been in lately. If they’re intent on taking Lincoln upmarket, I’d bet on them long before I’d bet on GM doing it as a complete package.

    • 0 avatar

      Ford’s success has come from being different rather than simply following the pack. they should continue by ending the alpha numeric names, stop forcing dealers out of business, and requiring remaining franchisees to upgrade according to some MBA’s non-sensical ideology. that has been GM’s way of doing business. Ford showed class announcing assembly of small cars in Michigan without resorting to Tier 2 payscales. this is leadership to admire, as opposed to trotting like the Turkeys in The Tubes.

      focus on making product and get out of the dealers’ way. give them margin and let them do their job.

    • 0 avatar
      SVX pearlie

      I’ve had a lot of steak dinners, and I can tell you that Outback beats the hell out of Sizzler, and that Lawry’s beats the hell out of Outback.

      However, I don’t believe that Morton’s is better than Lawry’s, and certainly not for the money.

      And then, there are pretenders like Fleming’s. Sure, the interior is dark like Mortons, but you can’t actually taste any of the meat because they overseason everything. Worse yet, there’s no consistency visit-to-visit. You literally cannot predict what your next experience will be like, indeed, you cannot even know if you’ll get the Lava Cake dessert that you pre-ordered.

      Getting back to cars, Ford is an Outback, Chrysler is a Sizzler, Benz is a Morton’s and Caddy is a Lawry’s, and Lincoln is a Fleming’s. Until Lincoln gets their shit together, they’re going to be second rate, and Outback will always be a better deal.

    • 0 avatar
      TrailerTrash

      I have no problem with Ford trying to do something.
      IF they are going to back this up with really nice new cars, great.

      But the Genesis seems to be selling nicely without its own barn.
      And they will be putting the Equus right in there with the entire line!

      So bring on the new cars.
      Bring on the new dealer look.

      Do something!

  • avatar
    John Horner

    I’m not a fan of dealer culls, but Ford probably needs to do this. For years our nearest local “Ford-Lincoln-Mercury” dealership was a rather pathetic place, and I doubt they sold more than one or two Lincolns a months. Then another operator built a thoroughly modern Ford dealership fifteen miles away and put the old shop out of business in a matter of a few years. The new guy didn’t bother getting Mercury or Lincoln franchises, and that was a smart move.
    Nobody buying a luxury vehicle wants to mix it up with the guy trying to figure out if he can get a loan, any loan, on a five year old Ford Ranger. If Lincoln is ever going to be relevant again, it needs a first class dealer network. Most of the existing Lincoln dealers are in sad, sad shape. Granted that is because Lincolns have hardly been a thriving brand for many years.
    So, Ford needs to get the products (and names!) right, but they also need a credible dealer network if Lincoln is to survive. So it goes.
     

  • avatar
    philadlj

    I hope one of the new dealership standards is, no landau roofs on the showroom floor.
    Come to think of it, no MKTs either; they’ll scare even the grown children.

  • avatar
    Z71_Silvy

    A few days ago Ford reported that 35 percent of the Lincoln dealers are superfluous and should be sent out to pasture

     
    Funny…most think the Lincoln brand and it’s half-assed rebadges are ‘superfluous’ and should be ‘sent out to pasture’.
     
    Their sales are nothing short of horrid.  People are rejecting their line of near-luxury rebadges (that are priced WAYYYY too high for what they are) in droves.
     
    For the exact same reasons Ford killed the BETTER SELLING Mercury brand….Lincoln should go too.  They just cannot compete with luxury makes like Cadillac and even near luxury makes like Buick.

    • 0 avatar
      Zackman

      Beginning in 1988,

      AMC – history
      Eagle – gone
      Plymouth – gone
      Oldsmobile – gone
      Pontiac – gone
      Saturn – gone
      Hummer – gone
      Mercury – gone

      Did I miss anyone? Does anybody miss any of the aforementioned brands? Yes – me, Plymouth.

      Who’s next? Not many more domestic brands left. What’s worth saving? Lincoln? Maybe, not sure. I wouldn’t buy one as I’m not a Ford man, but that’s irrelevant. Buick? Definitely. GMC? Maybe only for the heavy stuff. Chrysler (as a brand and as a company)? We’ll see. By extension; Jeep – Definitely. Dodge? Hmmm. Ram? Who’s fooling who? Cadillac? Of course.

      All the defunct brands have been filled in by foreign automakers, some with the domestic’s help, even.

      If Ford drops Lincoln, can they survive on the strength of one brand? We’ll see. I get this image in my mind of a tire (or balloon) slowly leaking air with no one to re-inflate it. Pretty soon, it’s gone. Is that’s what’s happening here, or just market realities? If so, why? Why didn’t the domestics wake up earlier and get their houses in order? I know this has been discussed, but still sad to see it happen, just the same.

    • 0 avatar
      getacargetacheck

      Zackman: you left off Geo, Merkur, Passport (Canada) and Asuna (Canada). Ford could do without Lincoln, but it’s not necessary.

  • avatar
    OldandSlow

    Another vote – that product is the key in this segment.
     
    VW and Audis share some platforms, but enough engineering went into the Audi version to differentiate from a VW.   The same is true for Lexus and Toyota.   A typical Lincoln needs to be more refined, forgo the Sebring/Avenger sheet metal sharing  and have some sort of premium engineering to further differentiate it from a similar Ford.
     
    A Lincoln should not look like a Ford Edge with fangs.  Also, get rid of the initials.  Let’s see some proper model names instead.

    • 0 avatar

      I’m not a Ford guy, but I know they’ve made some pretty nice cars. If they want Lincoln to sell as a premuim “one and only” brand, they have to make sure that it doesn’t remind customers of a cheaper Ford.

      I haven’t paid much attention to them lately, but I remember that back in the mid ’70s a neighbour had a new Lincoln, and his wife had a Pinto. She gave me a lift to work one day and I was more than a little surprised to see that the instrument cluster was the same as the one in his Lincoln. One of Ford’s ‘better ideas’?

      A Lincoln has to be a Lincoln!, and nothing but, if they want this to work for them.

  • avatar
    stryker1

    Agree above. The product is the problem, and the over abundance of dealerships is the effect. Who, when going out to purchase a new vehicle for that kind of money, even bothers going to a Lincoln dealership? The only lincolns I’ve seen that get sold are old and cheap.

  • avatar
    getacargetacheck

    Not every Lincoln dealer is paired with Ford or with Mercury standalone.  Our local L-M dealer is paired with Mazda and has moved into their former Saturn store.  My town has standalone BMW and Mercedes dealers as large as the local Chevy dealer.  So, we have just the right “luxury” demographic to make Lincoln work in theory.  But it’s hard to imagine our Lincoln dealer getting luxury upgrades to its store while sharing them with Mazda.  Should be interesting to see how that works out.

  • avatar
    cdnsfan27

    Ford has a problem with Lincoln but at least they are adrressing it. The dealerships DO need to be upgraded but the product and its nomenclature need to be improved. My solution for fixing Lincoln (I am available Mr. M) is first get back to real names…enough with this MK(crap) that no one can keep staight. Then fix the product, Lincolns are butt ugly with the faces being the worst of all. How can designers come up with a beautiful and elegant Taurus and then turn it into the MKS monstrosity? The interiors are better but again I find the Fords more pleasing. If a Ford looks better and performs better than a Lincoln for thousands less, why Lincoln?

  • avatar
    gslippy

    If upscale dealerships were the answer, Hummer would still be in business.

    And if hot spokesgirls were the answer, Mercury would still be in business.

  • avatar

    As a current Lincoln owner (bought used, so i didn’t get the new-dealer experience anyway) I think a big part of the problem is that they need to change brand perception and have to make some substantial cosmetic changes for that to happen.  The old-school Big3 dealership model where they have “blended” full-line products isn’t where the current luxury market is anymore.  I’m not saying it never happens, but I don’t recall seeing many Nissan/Infiniti, Honda/Acura, VW/Audi (In the US, anyway), etc combinations among the import brands.  However, you can’t swing a dead cat without hitting a Ford/Lincoln/Mercury, Chevy/Buick/Caddy, or Dodge/Chrysler/Playskool dealer.
    I think that’s probably OK with Lincoln’s traditional over-60 demographic, but I think it does create the wrong “vibe” when trying to attract the affluent, successful buyers they’re shooting for.  The retired accountant next door to me is fine taking his town car to the local F/L/M dealer for service, and there’s a good chance he can remember the time when the buff mags in the service waiting room were published.  He also goes to a traditional barber shop (same car magazines and old Playboys) and wears a fedora.  The F/L/M ecosystem has been part of his entire car-owning life.
    But that guy is on his last Town Car.  At some point in the near future, one of them is going to die and probably kill the other in the process.  His son drives a BMW, and was frankly shocked at how nice my ’09 MKX is.  Sure, it’s a gussied-up Edge, but it’s gussied-up in a good way.  He actually told me, “It’s a shame Ford sells that, since I hate dealing with Billy Bob’s Ford.”  He hates dealing with his dad’s preferred dealership, and has nothing but good things to say about his BMW place.  He likes the upscale environment and the way they treat him like he’s important.
    So Lincoln really does need to make world-class products.  I think they’re trying, although their recent exterior styling makes Acura look tasteful, but until there’s a matching ownership experience that product isn’t going to get looked-at.  It’s all part of the same problem.

  • avatar
    Amendment X

    Like many of you here, Lincoln continues to worry me. I have faith in Mulally’s leadership abilities but I wonder about his approach to Lincoln. The brand has undergone many changes since he took over 4 years ago but how many of those changes were his to begin with? They were probably already in the pipeline when he took over.
     
    We need a few more years to really see what’s up his sleeve with Lincoln. They absolutely have to abandon the silly naming scheme.
     
    I am sure the Lincoln dealerships saw this coming for a long time. With no Mercury to prop up sales, they can’t survive on just the Lincoln brand.


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