Ford Motor Co. has cut about 20 percent of its metropolitan Lincoln dealerships in the past six months as it seeks to revive its luxury line and boost sales at the remaining stores, said a person familiar with the situation.
The automaker now has about 400 Lincoln dealers in the nation’s top 130 metropolitan markets, said the person, who asked not to be identified revealing internal data. Ford told Lincoln dealers in October that it planned to eliminate 175 of its 500 metro Lincoln outlets, reported Bloomberg.
“Our vision is to substantially reduce the number of dealers to become competitive,” Mark Fields, Ford’s president of the Americas, said Oct. 5 after meeting with Lincoln dealers in Dearborn, Michigan, where Ford is based. “We need to make sure our dealers are competitive in their throughput so they can provide the experience our customers expect.”
Ford executives are meeting today and tomorrow in Dearborn with the 12-member Lincoln dealer council to review plans for upgrading customer service and redesigning models to reverse declining sales, the person said. Lincoln sales have fallen 11 percent this year, while the overall U.S. auto market has gained 20 percent, according to Autodata Corp.
Lincoln sales have plunged almost two-thirds from their 1990 peak and averaged 1.4 cars sold a week for each dealer in the first quarter, according to Autodata, based in Woodcliff Lake, New Jersey. Lincoln, which was last the top-selling luxury brand in the U.S. in 1999, sold 36 percent as many models as Daimler AG’s Mercedes-Benz in the U.S. in the first quarter.
“With Lincoln, we’re clearly in a transition period,” Ford Chief Executive Officer Alan Mulally told reporters April 13 after a speech in Detroit. “Our commitment to the dealers now is that we’re going to make a fantastic family of vehicles that will be very competitive. We’re all going through some transition as it takes time to get these vehicles to market.”
Ford has said it plans to introduce seven new or significantly redesigned Lincoln models, including a small car, by 2014. The automaker has overhauled Lincoln’s design theme to outfit vehicles with prominent, split-bow grilles and is dedicating design, engineering and marketing staff to the brand, rather than having it share with Ford.
Ford had planned to unveil a new look for Lincoln in a concept car at the New York auto show this week. The automaker delayed that introduction indefinitely after hiring Cadillac stylist Max Wolff in December as Lincoln’s new chief designer, people familiar with the plans have said.
Ford hasn’t revealed a timeline for when it expects to reach its goal of about 325 Metro Lincoln dealers. Ford also has about 700 Lincoln dealers in rural areas, which aren’t targeted for closing.
Ford had reduced its metro Lincoln dealer count to 434 by February, Ken Czubay, vice president of U.S. sales, said at the time. The cuts are aimed at discouraging Lincoln dealers from competing against each other on price so they can take on the luxury brands of other automakers.
Since October, Ford has been meeting with Lincoln store owners to lay out new expectations, including upgraded customer service and renovated showrooms, at a cost of as much as $2 million per store, dealers have said.
Ford is offering to buy out Lincoln dealers or pair them with Ford franchises, where sales have risen 25 percent this year.
Beginning Aug. 31, Lincoln dealers have to meet new standards for staffing, training and begin providing owners with perks such as car washes. Ford is seeking to upgrade the buying experience to emulate Bayerische Motoren Werke AG, Toyota Motor Corp’s Lexus and Mercedes-Benz. Lincoln dealers who fail to meet the new standards may not receive as much financial support from Ford, the person said.
Mulally is seeking younger buyers and a bigger slice of the more-profitable premium-car market with models such as the MKZ gasoline-electric hybrid sedan and touch-screen technology to operate phone, stereo, navigation and climate controls.
Since arriving from Boeing Co. in 2006, Mulally has sold Jaguar, Land Rover, Aston Martin and Volvo to focus solely on Lincoln for the automaker’s luxury strategy.
“The whole plan was that we divest ourselves of the other premium brands,” Mulally said. “We had all these other luxury brands and we didn’t invest as much in Lincoln.”
