May 5, 2013 at 11:21 AM ET
Ford Motor Co.’s struggling Lincoln division caught a much-needed break last month, with a sharp upturn in sales for its new MKZ sedan following months of weak demand that raised questions about the luxury brand’s long-term survival.
Once a dominant nameplate in the U.S. market, Lincoln has fallen off the radar screen for most American luxury buyers, senior company officials admit, a downfall they had promised to start reversing with last year’s well-publicized launch of the new MKZ sedan. But the situation worsened due to concerns about quality issues that forced Lincoln to slow production and put each MKZ through a close inspection.
As a result, Lincoln sales for the first three months of 2013 were off 24 percent -- dipping to levels not seen in decades -- even as key luxury competitors posted double-digit gains. But with parent Ford claiming to have those quality issues under control, Lincoln has finally begun ramping up production of the MKZ, delivering about 11,000 to dealers in recent weeks, retail sales surging to about 4,000 in April alone – the nameplate’s best month ever.
The upturn could help soften analyst criticism that Ford might be forced to pull the Lincoln brand, as it did with the mid-market Mercury several years ago.
But even Ford global marketing chief Jim Farley, recently named head of the Lincoln brand, admits the crisis isn’t over.
“This is going to be a long road … remaking Lincoln,” he acknowledged during a media conference call. “It will not only need to continue but accelerate for us to continue to be competitive.”
How long remains the big question. Farley has hinted Ford now recognizes it could take as much as two decades to transform Lincoln into a truly competitive luxury brand, a process that will require a significant investment in product – and a push to transform the marque into a global, rather than North American, brand.
That’s a long-term commitment American automakers seldom make. But Farley is quick to point to the slow slog faced by key competitor Audi. Long a second-tier brand that came close to pulling out of the U.S. market in 1992, Audi is today one of the American luxury market’s fastest-growing brands – neck-and-neck with rival BMW for dominance in the global high-line automotive market.
Lincoln could take comfort in watching the slow comeback of its cross-town rival, General Motors’ Cadillac brand. Through the early 1990s, the two marques dominated the U.S. market before being pushed aside by foreign brands like Lexus, BMW and Mercedes-Benz. But Cadillac has gained momentum with new offerings like the compact ATS. Directly targeted against the vaunted BMW 3-Series, it was named North American Car of the Year during January’s North American International Auto Show in Detroit.
Lincoln hoped to achieve similar success with the MKZ, but the new sedan, which starts at $35,925, got off to a rocky start. Following early quality problems with several other new models like the Ford Fusion sedan and Escape crossover, the maker decided to pare back production of the Lincoln model, shipping each car to Detroit for close inspection before releasing them to dealers.
The delay short-circuited a costly launch campaign wrapped around a pair of Super Bowl ads and left frustrated dealers apologizing to potential buyers who, in many cases, marched over to competing makers’ dealers.
The surge in April sales suggests Lincoln can still salvage the MKZ, though Farley has suggested it could require a costly second launch campaign.
Even then, the MKZ can only begin the process of salvaging the Lincoln brand. These days no single model can carry a maker. Luxury brands are proliferating product at a dizzying rate. Mercedes, for example, offers an alphabet soup of sedans, coupes, sports cars, crossovers and other models that don’t fit easy categorization.
Lincoln has confirmed plans for four new models by late 2014, including the MKZ, a production version of the MKC compact crossover concept revealed in Detroit last January, an update of the big MKS sedan and a long-overdue replacement for the massive Navigator SUV.
Beyond that, Ford CEO Alan Mulally has promised still more to follow, including a sports coupe expected to be based on the same platform as the next-generation Ford Mustang.
The bump in April sales is welcome news at Ford, but by no means a guarantee that Lincoln is out of the woods. The maker needs to continue gaining momentum and expand its reach to a new generation of buyers that might not have given Lincoln much thought. It is a process that will likely take years, and a level of commitment the luxury brand hasn’t had in decades.
Copyright © 2009-2013, The Detroit Bureau