Lincoln Finally Begins Its Resurgence

Fortunately for Lincoln, Ford (NYSE: F  ) has been on such a tear this year that the stumbles in its luxury brand have been largely overlooked – for now. That won't always be the case, however. After the great recession, poor executive decisions, and bankruptcies forced upon General Motors (NYSE: GM  ) and Chrysler, Ford opted to slash all of its global brands except its namesake Blue Oval and Lincoln.

Ford's need for its luxury line can't be understated; it's extremely important as high-margin luxury customers have few valid options at Ford/Lincoln dealerships and may opt to leave for a competitor. Ford has a plan to revive its luxury brand, and its resurgence has begun. Here's a look at numbers released Tuesday.

Lincoln the "has-been"
It's hard to believe that 15 years ago Lincoln was actually the top-selling U.S. luxury brand with its Navigator one of the nation's most popular luxury rides. Unfortunately it's been a long fall from the top, and this year Lincoln's sales through June total 38,288, which is down 8.8% from last year, a decline due mainly to the three-month delay in MKZ sales. 

To put Lincoln's nearly 40,000 in sales year to date in perspective, consider that it represents just 3% of Ford's entire company sales. Ford's Focus, Fusion, and Escape sold more than three times Lincoln's total sales individually. Even uglier, the F-Series has already sold nine times the amount of Lincoln's entire brand this year.

I suppose that isn't fair, comparing the mass-produced vehicles of Ford's Blue Oval brand to its luxury brand. But it does put in perspective how far it has to go to become relevant again – which is one of Ford's top priorities.

If you want to compare apples to apples, take a look at GM's Cadillac brand which is enjoying a 14.9% sales increase in June, assisting the luxury brand's fastest growth since the disco days of 1976. GM delivered over 83,679 Cadillac's this year for a 33.2% gain, compared to Lincoln's 38,288 as previously mentioned.

Ford investors, fear not: Lincoln's resurgence is slightly behind Cadillac's – similar to how GM's entire resurgence is years behind Ford's. We're seeing a strong uptick in MKZ sales – Lincoln's flagship vehicle – this quarter representing its best quarterly performance ever.

Information from Ford's monthly sales press releases.

The MKZ is the first of multiple vehicle redesigns or launches that will, Ford hopes, bump Lincoln's lineup back to relevancy. Keep in mind that these Lincoln sales don't cannibalize from typical Ford consumers, so any sales are purely incremental to Ford's top and bottom lines.

As Ford continues to focus on the most popular segments, consumers are anticipating the arrival of the MKC Crossover which has been met with very positive reviews.

Lincoln MKC Concept debut at Detroit Auto Show 2013.

If Ford can replicate its sales success from the Escape to the MKC, it will be a huge one-two punch for Lincoln as it fights to become relevant in the luxury market. After the MKC debut the details for new Lincoln products get a little hazy, but Ford plans to introduce a couple more vehicles. In addition to introducing new vehicles into the U.S. market, Ford plans to take its luxury line overseas as soon as 2014 to claim its piece of China's booming luxury-segment pie.

Bottom line
This is an exciting and tense time for Ford investors – a lot of important issues are up in the air. By 2015 Ford could have as many as three huge catalysts. There could be a return to profitability in Europe, which will reverse an expected $2 billion loss this year in bottom-line profits – an astronomical amount. Ford could also experience a revival in its Lincoln luxury line which will quickly add incremental sales revenue and profits – at better margins to boot. Ford also expects to introduce 15 new models into China by 2015 and double its market share, a move that would be worth billions.

If all three of these catalysts go positive for Ford, as is expected, we could be witnessing one of the markets best investments over the next two to three years – definitely worth another look for your portfolio.

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Read/Post Comments (5) | Recommend This Article (3)

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 July 03, 2013, at 10:55 AM, AmericanFirst wrote:


    GM did not go through bankruptcy, they went through Obamaruptcy, orchestrated by Obama and his cronies. If GM had gone through a normal bankruptcy, bondholders wound not have been subordinate to the UAW, neither would GM receive the $45B in corp. income tax relief that was awarded TARP participants.

  • Report this Comment On July 03, 2013, at 12:18 PM, TMFTwoCoins wrote:

    Yessir, "Obamaruptcy" was unique. But I can't mention that in every single article I write -- my editors might get annoyed. I try to remind people every now and again as it's an important thing to consider and remember.

  • Report this Comment On July 03, 2013, at 12:37 PM, AmericanFirst wrote:

    Obamaruptcy, was more than unique, the gov. purposely advantaged basically a bankrupt corp. (GM) for years over their primary U.S competitor (Ford) for political gain that would include laundering UAW dues back to the Democrat party.

    Ray Charles is six foot under and he can see that. GM will be finacially advantaged over Ford for years. However, the gov. also damaged the GM brand for years. This is what happens when you have a community organizer at the helm of the most powerful (was) economic engine in the world pulling the levers.

  • Report this Comment On July 03, 2013, at 1:49 PM, debug013 wrote:

    I've owned both a Lincoln and a Cadillac and the Lincoln. The Lincoln was by far the better of the two. I had nothing but trouble from the Cadillac for the 6 months I kept it, finally I just gave up and traded it for the Lincoln. It was a fine car and 5 years later, I had zero problems with it. Filled it with gas and did regular scheduled maintenance that was it.

  • Report this Comment On July 05, 2013, at 3:23 PM, voiceInDetroit wrote:

    I just came back from an 8 day trip to Colorado. I was pleasantly surprised to see many new Ford Focuses and Fusions. Last year in TX and Arkansas, we rarely saw a late model Ford car, just trucks and older cars.

    Regarding Obama's handling of the GM bankruptcy - I think they did an A+ job, better than any Republican would have done, and I am a staunch Republican. They reasoned, I think fairly, that the gov't aid was not to bail out the bondholders, but to keep jobs. The bondholders were entitled to the value the company would fetch if there were no gov't loans. I think they got double that, which is why they had no grounds to sue.

    Had GM gone thru a normal bankruptcy, all the pensioners would have become a public burden, also devastating the Michigan and Ohio economies. Had GM been able to cancel their pension obligation, Ford would have had no choice but to go bankrupt also. The debt that GM got to cancel is small compared to its pension debt.

    The gov't also made mistakes, of course. One was replacing the GM CEO with 2 gov't appointees.

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