Why Ford's Lincoln Chief Is Excited About China

Lincoln President Kumar Galhotra poses with the Lincoln Continental Concept at the New York International Auto Show last week. Source: Ford Motor Company.

Ford Motor Company (F 0.33%) executives at last week's New York International Auto Show made no secret of the fact that the striking Lincoln Continental Concept was designed with the Chinese market in mind.

But why is Ford suddenly so hot to sell Lincolns in China?

The answer might surprise you. According to Lincoln President Kumar Galhotra, Ford's market research showed that the Lincoln brand is held in extremely high regard by Chinese consumers -- even though the automaker had never officially sold Lincolns in China.

Combine that with the booming, still maturing market for luxury vehicles in China, and Ford CEO Mark Fields saw an opportunity.

Not long after becoming CEO last year, Fields tapped Galhotra to take charge of the effort. Galhotra, a longtime Ford engineer who had spent a stint leading product development for the automaker's Asia-Pacific region, was well positioned to seize the opportunity to turn Ford's staid old luxury brand into something that would appeal to Chinese -- and, yes, American -- consumers in a new way.

We spent some time talking to Galhotra on the Lincoln stand at last week's New York show. In the video below, you can hear what he had to say about Lincoln's plans for China -- and get a close-up look at the exciting Continental Concept, which was right behind us as we spoke.

A transcript of the video is below.

John Rosevear: Lincoln's looking to triple sales by 2020. A lot of that is going to come from China.

Kumar Galhotra: Yes. We sold about 100,000 units last year and we plan to grow to 300,000 by the end of the decade. That, of course, is going to come through two avenues. One is additional products. This is a product. We have also announced that we're working on two incremental products for our portfolio that will come toward the end of the decade. 

So new products and incremental products will add volume, and China will add volume. China, as you know, is the largest automotive industry today. The luxury segment there is about 6% of the market and it is growing from 6%. We expect it to grow to approximately 9%, and we are going to participate in that growth. China is very important to Lincoln. 

Rosevear: We all have a fair sense of where Lincoln fits into the luxury pantheon in the U.S. Who do you see as Lincoln's key competitors in China? 

Galhotra: It is a very similar market landscape there. Audi and BMW are very successful in China. I was actually head of product development for Ford Asia-Pacific before I moved back to the U.S. about a year and a half ago. 

While I was there, we started researching how Lincoln would fit into that landscape. We started researching the market. The luxury buyers. Several focus groups. And Lincoln is a highly regarded brand in China. Its perception of prestige is better than that of Audi. The favorable opinion is better than Lexus. And a lot of that is driven through our heritage. Chinese consumers are very tuned into the Lincoln heritage. Very tuned into American luxury. So there's huge opportunity for us from that perspective in China. 

Rosevear: Do you plan to make Lincolns in China or will they be imported from the U.S.? 

Galhotra: At the moment, the plans are for all vehicles to be imported. We're already selling the MKZ and the MKC. The MKX will be launched by the end of the year. We'll launch the Navigator there and we're also going to take this product there. As soon as we launch it here, at the same time it will for China, as well.