Ford's Planned Attack on Luxury

Ford's (NYSE: F  ) Lincoln luxury brand has been absolutely pathetic in sales recently -- the Mustang alone outsells its entire Lincoln line. While rumors previously spread that Lincoln might be killed off, Ford instead doubled down. Ford has done very well redesigning its light vehicle lineup, with the Focus and Fusion selling extremely well in 2012. It's F-Series truck continues to dominate as best-selling truck and vehicle on a yearly basis. The next big step is obvious: renovation of its luxury vehicles. Ford has a step-by-step plan to bring Lincoln back into competition with the likes of Audi, Lexus, Infiniti, and Cadillac. Here's how.

Jim Farley
One thing even hardcore General Motor fans can't deny, is that Alan Mulally is the industry's best CEO. It's clear that great management has a direct effect on a company's direction and success. That's why when I heard Jim Farley was promoted to executive vice president in charge of Lincoln, I was very excited. For those that don't recognize the name, not many can match Farley's resume in luxury strategy and success. Ford actually plucked him away from a successful career at Toyota that included running sales and product planning for the Lexus line. 

Creating the push
I have no doubt Farley will create a great marketing and product-planning strategy for Lincoln to renovate the entire brand line. That said, if the dealerships don't buy in to the idea, since sales have been so poor for so long, it will be in vain. To help create a push for the dealers to sell new Lincoln models, it will pay salespeople up to $500 for every Lincoln sold. It's dubbed the "Brand Champion" program, which aims to help it compete with its Lexus and Audi competitors. To help make it a quality push, every Ford/Lincoln dealer will have at least one associate trained on the Lincoln products and processes. The push, however, is only part of the equation.

Creating the pull
A chief marketing officer explained early in my career that we can make the greatest marketing campaign, but without a great product, we would have mediocre success at best. Giving sales incentives and training will be similar to pushing a string; without pull-through, you'll never achieve sales. To help create pull-through demand for new Lincoln vehicles, Farley is doing a couple of things. The first is looking into a new level of customization for its lineup. He didn't go into specifics, but eluded to possible engravings, color schemes, and similar options. "It will be expensive, but we've seen customers are willing to pay a special premium for customized vehicles," Farley said. "It raises a lot of questions about distribution and ordering," which Lincoln will study carefully in the next couple of years. 

Another thing being done, is creating sleek new designs and buzz around its vehicles. It seems to be working, as dealers are upset that the sleek new MKZ sedan hasn't arrived on time. It's one of the vehicles aimed to reinvigorate the all-but-dead Lincoln sales, which were down 4% in 2012 compared to the market rise of 13%. Dealers have also said pre-orders of the new sedan are the highest for any Lincoln since the Navigator in the 1990s, the last time Lincoln sales were relevant. Ford hopes the new design will help sales improve by double digits, and with a marketing plan that crosses magazines, newspapers, and a Super Bowl ad, it has a good chance to do so. 

Bottom line
During and after the recession, Ford had bigger things to focus on rather than renovating the Lincoln brand. Recently, everything other than sales in Europe have been going remarkably well, finally giving Ford the chance to focus on its luxury line. Bill Ford recently said: "Lincoln will be a luxury brand that customers will be proud to own, with vehicles that are characterized with stunning design and delivered with purity and simplicity. Lincoln will deliver quality in every aspect from the vehicle to the vehicle ownership experience and a surprising level of customer service."

When someone with the last name Ford says that, you tend to listen. When someone with a resume like Jim Farley is behind the new strategy, you buy in. When dealers are more anxious than ever to get their hands on new models, investors should be excited. This is the next step for Ford, and make no mistake: Lincoln is looking to make some noise.


Read/Post Comments (2) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 27, 2013, at 2:01 AM, chrisausten wrote:

    Oh my...where to begin!....This article sounds suspiciously like so many other internet articles about Lincoln...could there be some palm greasing going on?....I mean after all, a manufacturer that has to bribe it's salesmen with $500 per car just to push it's product, as opposed to designing a great looking vehicle that people actually want?...The article says that Lincoln has a "step-by-step" plan to compete with the likes of Audi, Lexus, Infiniti, and Cadillac, but how? Those other brands actually look like luxury cars (ok, just barely)...the Lincoln looks like a somewhat flattened out PT Cruiser....And Lincoln is going to use "engravings and color schemes" to help peddle those cars?...Talk about putting lipstick on a pig!....Until recently, I've been a Lincoln owner all my life (I bought my first one back in the mid '70's), and many friends and family have owned them as well...but now, I can't find one person who would buy one and pay that kind of money for a car that is so "dog butt ugly". I'm sure there are some people who will buy them, after all, there were people who bought PT Cruisers...but then again, the PT didn't cost what a Lincoln does!...Why doesn't Ford learn a lesson from it's own recent success with the Mustang...the article states that the Mustang outsells the entire Lincoln line...why?...because the Mustang looks like a Mustang...almost identical to the way it looked in the '60's. What if they had redesigned the Mustang so that it was unrecognizable...do you think it's sales would be as good just because it had the Mustang name stuck on it?...No! It's sales are great because it looks like what people expect a Mustang to look like. I remember a time when Lincolns were referred to as "The American Rolls Royce"....Bring back that look and they will bring back good sales...as it is now, they're just beating a dead horse.

  • Report this Comment On January 27, 2013, at 12:04 PM, TMFTwoCoins wrote:

    The new MKZ sedan and MKC crossover has created more excitement with dealers and consumers than Lincoln has seen in more than 3 decades. Pre-orders for the sedan top anything since the Navigator. Clearly there is demand for the new look Lincoln.

    For exactly the reasons I stated, Lincoln will finally make its comeback. Count on it.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2216383, ~/Articles/ArticleHandler.aspx, 11/20/2014 9:59:16 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement