Ford Traded In Keys To The Wrong Luxury Cars


If Ford Motor is going to revive its lackluster Lincoln brand, it needs to convince luxury car buyers that Lincoln showrooms have exciting vehicles to offer. But first, it has to convince its own employees of that fact.

Beginning this week, Ford has been inviting employees and retirees for a sneak peek of Lincoln’s future lineup to demonstrate the company’s commitment to rebuilding its only remaining luxury brand following the sale of Jaguar, Land Rover and Aston Martin. The so-called “Lincoln immersion,” outlining future styling and strategy direction for the nameplate, is similar to the product backgrounders Ford used a few years ago to build employee morale in the midst of a painful turnaround.

Lincoln sold just 85,828 cars in 2010, 35% fewer than its most recent peak in 2007. Through the first half of 2011, sales are down 4%. Analysts believe Lincoln is losing money, but the carmaker does not break out profits by division, so it’s difficult to know. Ford declined to provide financial results for Lincoln.

Meanwhile, Jaguar and Land Rover, two of the iconic brands Ford sold at fire sale prices in 2008, are thriving under their new owner, India’s Tata Motors. Now combined as a subsidiary of Tata, Jaguar Land Rover reported a net profit of $1.7 billion for the fiscal year ended March 31, on $15.8 billion in revenue. The carmaker attributed the record results to improved market conditions, the popularity of new models like the Jaguar XJ, favorable currency exchange rates and strong growth in China.

Maybe it’s a bit painful for the folks at Ford to watch Tata reap the benefits of their development efforts. Jaguar’s redesigned flagship, the $72,500 XJ sedan, has received rave reviews for its contemporary styling and sleek performance. Sales have tripled so far this year. The Land Rover LR4 is also doing well, with sales up 29% so far in 2011. Both vehicles were conceived under Ford management. Next up is the Range Rover Evoque, the smallest, lightest and most fuel-efficient Land Rover yet. It was initiated under Ford, but has undergone substantial changes since Tata took over. Jaguar Land Rover recently hired seasoned industry veterans, including Carl-Peter Forster from General Motors and Ralf Speth from BMW, to ensure the momentum continues.

Ford acquired Jaguar and Land Rover separately more than a decade ago for a total of $5.3 billion, but profits, particularly at Jaguar, proved elusive. In June 2008, Ford sold the two luxury brands to Tata, a maker of commercial vehicles and inexpensive small cars like the tiny Nano, for $2.8 billion. Ford’s chief executive, Alan Mulally, said the company had too many brands and he wanted to focus on strengthening the core Ford brand around the world.

As a result, however, Lincoln, and its sister brand, Mercury, became nothing more than higher-priced rip-offs of Ford vehicles. The Lincoln MKZ, for instance, is a gussied-up Ford Fusion, and the MKS flagship sedan is a rich man’s Ford Taurus.

Now, after languishing for years, Lincoln is getting some much-needed attention. The parent company killed off Mercury in 2010 and told Lincoln’s shrunken dealer network last month that it will invest about $1 billion in seven new or refreshed models by 2014, including a compact crossover utility vehicle. The new Lincolns will have styling all their own, and technologies not available in Ford vehicles like computer-controlled suspensions and push-button gear shifters.

The first updated vehicles, the 2013 MKS sedan and MKT full-size crossover utility, will go on sale next spring, followed by a redesigned MKZ in mid-2012. Then, in early 2013, Lincoln will introduce its first compact crossover, based on Ford’s global small-car architecture. That will be followed by two more SUV-type vehicles–a more fuel-efficient Navigator and a redesigned MKX–both for the 2014 model year. By 2015, the MKS will be ready for a complete overhaul.

Missing from Lincoln’s future lineup will be the well-known Town Car, which ends production in August. Ford’s hope is that limo drivers will choose the MKT crossover for their clientele instead.

Will it be enough? Rivals don’t think so. General Motors chief executive Dan Akerson recently dismissed Lincoln’s rejuvenation efforts. “You might as well sprinkle holy water. It’s over,” he told The Detroit News.

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