Lincoln Trimming Fleet Fat to Shore Up Residual Values

Matt Posky
by Matt Posky

Lincoln is a brand that never fully recovered from the post-recession sales slump. While volume has improved over the last several years, 2017 actually saw a very slight decrease in overall deliveries. That’s a shame, as we’ve seen Lincoln making efforts to turn things around.

Sure, the domestic luxury brand could still stand to distance itself from mainstream Fords a bit more. But Lincoln has stopped attempting to sell Buick-grade luxury at Cadillac prices and seems intent on pursuing more elegant designs. Still, Ford Motor Co. CEO Jim Hackett wants the company’s operational fitness in top form as soon as possible, and getting Lincoln’s overall value up is an important part of that goal.

One way of doing this is by leaning on utility vehicles. Navigator sales have improved dramatically since the fourth-generation model hit dealers and the Aviator seems to hold real promise. But it’s not scheduled for sale until the 2020 model year, which means Lincoln has to do more than just wait around until new and updated SUVs can right the ship.

So, like so many premium automakers, Lincoln has begun cutting back on fleet sales in the hopes that those vehicles don’t come back into circulation and screw with residual values. Given the popularity of leasing, it’s doubly important.

Ford says culling fleet sales to rental companies has already resulted in a 27-percent decline in Lincoln’s daily rentals through the first quarter of 2018. While the decrease is noteworthy, only about 9 percent of the brand’s total volume went to rental agencies last year. Another 2 percent going toward commercial businesses. While the former will continue to be cut, Lincoln has said it’ll continue to furnish airport and hotel livery services. However, it does intend to scale back provisional company cars for both Ford employees and outside agencies.

“Those are very deliberate efforts to really focus on residual values as our new products come out,” Robert Parker, Lincoln’s director of marketing, sales and service, told Automotive News during 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.”

Parker noted the abandonment of fleet volume has hurt short-term sales but he believes it’s the right move to make in the long run. Ford data has also said that Lincoln’s incentive spending is down while its average transaction price was up for the first quarter.

[Image: Ford Motor Company]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Cobrajet429 Cobrajet429 on Apr 10, 2018

    When they will put a V8 in this?

  • Jimmyy Jimmyy on Apr 10, 2018

    Seriously, if you are in the market for a vehicle in this class, would you rather be seen in the Toyota Land Cruiser, or the Navigator? Being an east/west coast resident, I have never seen a 18 Navigator on the road.

  • Kwik_Shift_Pro4X Take some time today to realize that virtually zero soldiers had died defending your border.
  • Tassos As somebody who is NOT a stupid fanatic about EVs one way or the other:No manufacturer has built a "Better Tesla" EV yet. Most have tried, we wait for TOyota only (last hope for the Tesla haters)UNLESS a DIRT CHEAP Model 2 comes along (will never happen in the next 2 or 3 years), Do NOT expect that 7% to go to even 10%, let alone the ... 30% clueless Idiot Joe Biden voters expect. If anything, PLUG INS and HYBRIDS may, in the SHORT term, bring the 7% down.
  • Pig_Iron 💝
  • Geozinger Put in the veggie garden (Western Michigan, we still can get frost this late in the year) finished the remainder of the landscaping updates and hand washed both my beater Pontiac and the Town and Country! Going to the beach today...
  • Rochester I wouldn't obsess over the rate of change, it's happening whether we want it or not.
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