The Homa Files

TakeAway: Just because Ford calls Lincoln its luxury brand doesn’t make it so.  Luxury is in the eye of the beholder and Ford faces the challenging task of changing customer perceptions of its stodgy, “upscale” brand.  So far, the results have been disappointing.

The less-than-luxury perception of Lincoln is not just the result of a communications gap.  Ford has been slow to update the Lincoln product line with original designs not based on middle-market Ford-branded models.

Training Lincoln dealers to offer “high-touch” service is important for the luxury segment, but shouldn’t Ford first figure out how to get customers to the dealerships?  The new models launching this summer will tell us if they got it right.

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Excerpted from Bloomberg Businessweek, “With Lincoln, Ford Isn’t in the Lap of Luxury,” by Keith Naughton, May 6, 2010

Business is booming in Jack Kain’s Ford dealership in London, Ky. Not so much, though, at his Lincoln showroom, where new models … go begging for buyers …

Ford is on a roll, as mainstream car buyers embrace the American brand that didn’t go bankrupt. Now that CEO Alan Mulally is unloading Volvo, however, Ford’s upscale ambitions are riding on Lincoln. Sales at the unit are down 64% from its 1990 peak and buyers average an industry-high age of 62 … “To younger generations, that’s grandpa’s car,” says auto analyst Jesse Toprak … “That doesn’t help when you’re going up against Mercedes and BMW.”

Ford is trying to give Lincoln a hip implant. It’s outfitted four new models with more-dramatic design and installed high-tech features including a voice-activated phone and entertainment system …

The new look isn’t helping much. Lincoln’s U.S. market share is stuck at a paltry 0.8% this year, while the Ford nameplate grew at its fastest rate since 1977 … Lincoln is still defined by the black Town Car that has ferried generations of business travelers to the airport,

Ford long ignored Lincoln, in part because … it bought a stable of European luxury brands that seemed to hold more potential: Jaguar, Land Rover, Aston Martin, and Volvo. But … Mulally began dismantling what he called Ford’s “house of brands,” selling off the European lines at fire sale prices. The idea was to first fix its largest franchise, the middle-market Ford brand … Lincoln, whose models are based on Ford’s mechanical platforms and built in Ford plants, would be kept and fixed later.

Ford is retiring the Town Car next year and launching new models aimed at younger buyers like the MKX sport wagon this summer. It’s infusing Lincoln advertising with Gen X-friendly music from the 1980s. And Lincoln dealers are being trained to offer the high-touch service given by some European manufacturers …

The bottom line: Ford dumped its luxe brands to focus on its core vehicles. Now it’s left with aging Lincoln just as luxury demand is set to take off.

Edit by DMG

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Full Article
http://www.businessweek.com/magazine/content/10_20/b4178023174411.htm

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This entry was posted on May 14, 2010 at 7:35 am and is filed under Autos - Travel, Mktg - Positioning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.