Lincoln Dealers: An Endangered Species?
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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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.
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.