Lincoln Trimming Fleet Fat to Shore Up Residual Values

Matt Posky
by Matt Posky
lincoln trimming fleet fat to shore up residual values

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]

Join the conversation
2 of 34 comments
  • 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.

  • SCE to AUX Toyota the follower, as usual. It will be 5 years before such a vehicle is available.I can't think of anything innovative from them since the Gen 1 Prius. Even their mythical solid state battery remains vaporware.They look like pre-2009 General Motors. They could fall hard.
  • Chris P Bacon I've always liked the looks of the Clubman, especially the original model. But like a few others here, I've had the Countryman as a rental, and for the price point, I couldn't see spending my own money on one. Maybe with a stick it would be a little more fun, but that 3 cylinder engine just couldn't provide the kick I expected.
  • EBFlex Recall number 13 for the 2020 Explorer and the 2020 MKExplorer.
  • CEastwood Every time something like this is mentioned it almost never happens because the auto maker is afraid of it taking sales away from an existing model - the Tacoma in this instance . It's why VW never brought the Scirrocco and Polo stateside fearful of losing Golf sales .
  • Bca65698966 V6 Accord owner here. The VTEC crossover is definitely a thing, especially after I got a performance tune for the car. The loss of VTEC will probably result in a slower vehicle overall for one reason: power under the curve. While the peak horsepower may remain the same, the amount of horsepower and torque up to that peak may be less overall. The beauty of variable cam lift is not only the ability to gain more power at upper rpm’s on the “big cam”, but the ability to gain torque down low on the “small cam”. Low rpm torque gets the vehicle moving and then big horsepower at upper rpm’s gains speed. Having only one cam profile is now introducing a compromise versus the VTEC setup. I guess it’s possible that with direct injection they are able to keep the low rpm torque there (I’ve read that DI helps with low rpm torque) but I’m skeptical it will match a well tuned variable lift setup.