It's a little amusing to see Matthew McConaughey, who played a slightly sketchy character in 2011's The Lincoln Lawyer, traveling around in a Lincoln town car as he becomes the new face of the company's advertising.
It's no secret Lincoln has been struggling over the last decade, and has had a difficult time luring younger and more affluent buyers with an aging and dull vehicle lineup. McConaughey, an Academy Award winner for Best Actor, could certainly help in that department, but first Lincoln will have to avoid repeating a huge mistake.
MKC must avoid the MKZ debacle
To say last year's launch of Lincoln's flagship MKZ sedan was embarrassing would be an understatement. Ford (NYSE:F) had declared the Lincoln MKZ the beginning of a new era, a rebirth of the Lincoln brand that had fallen off a cliff from its success in the 1990s. Unfortunately, its advertising got mixed reviews, and that problem was compounded by an even bigger mistake.
Lincoln ran two Super Bowl ads in 2013, which did spur consumer interest and dealer orders. However, due to supplier bottlenecks and longer-than-anticipated quality checks, supply of the Lincoln MKZ arrived months after its advertising, and the lack of vehicle inventory sent sales plummeting on top of its advertising not having its full impact.
Fast-forward to today, and Lincoln is determined not to waste its advertising campaign featuring McConaughey and an all-new MKC luxury crossover. Lincoln's all-new MKC, aiming to serve a surging luxury crossover market, arrived at dealerships in May, selling 677 vehicles before more than doubling to 1,534 and 1,760 units sold in July and August, respectively. With ample supply reaching dealerships, Lincoln just recently launched its new ad campaign.
"When Lincoln came to me with the idea and the campaign, I liked what the message was about," McConaughey told Automotive News. "'Authentic' was the word that kept coming out. I like the history, the fact that it's American made. The campaign's not screaming for attention. It's as much about the mood, the silence between the words."
Lincoln's MKC launch has clearly started off much smoother than that of the brand's flagship MKZ, with ample vehicle supply reaching dealerships before advertising hit television screens across America. This is the beginning of a two-year endorsement deal between Lincoln and McConaughey, and time will tell how effective the campaign will be. However, that won't be the last hurdle facing Lincoln, and McConaughey won't be able to help on the next task.
Lincoln can't just be Super-Ford
One of the biggest consumer complaints is that Lincoln, in the past, was just a rebranded Ford vehicle -- and to some extent, those complaints were accurate. Unfortunately, in recent years Ford hasn't had the funds to pour into the revitalization of its all-but-dead luxury brand, and that had a negative impact on the quality offered by Lincoln vehicles. That's beginning to change, as Ford has pledged to spend the money to develop all-new vehicles, as well as upping the quality, technology, and drive trains on its Lincoln lineup. Ford's newly devoted attention to Lincoln has already paid off to some extent: Lincoln was one of the most improved brands in J.D. Power's 2014 car quality survey, jumping seven spots into the top 10.
Lincoln has yet to develop a knockout vehicle that will open up comparisons to what the market considers true luxury vehicles -- think: BMW, Mercedes-Benz, Lexus. Likely, this rebirth in Lincoln is going to take decades for it to compete directly in sales and quality with those global luxury brands. Despite the length of time required, and, of course, large amounts of effort and capital, it will be very important.
Consider these two factors. First, a successful Lincoln means larger improvements on Ford's top and bottom lines, as luxury vehicles command higher transaction prices and fatter margins -- meaning more of each dollar is going to Ford's piggy bank. That's something investors love to see, and it's one reason Ford doesn't trade at a premium price, as global automakers with a successful brand often do.
Second, consider the incremental sales Ford will garner when a loyal consumer of many years is ready to jump from a mainstream vehicle to a top-of-the-line luxury vehicle. Oftentimes, despite being a Ford fan, the consumer must head off a Ford/Lincoln lot to find the desired luxury vehicle -- a lost sale, which is devastating in an industry that commands very high loyalty and retention rates on vehicle brands.
Ultimately, Lincoln's new marketing campaign with the MKC is a great step, and could prove very valuable in the long-term revival of a brand that had completely lost its way over the last decade-and-a-half.
Daniel Miller owns shares of Ford. The Motley Fool recommends BMW and Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.