Lincoln Mercury president says brand is on solid ground
Darryl Hazel, the newly appointed president of Ford Motor Co.'s Lincoln Mercury division, was in Louisville Oct. 4 to help Blue Grass Lincoln Mercury owners and employees dedicate a new gallery facility.
Blue Grass Automotive Inc., which is owned by Andrew D. Vine, Michael R. Vine and James E. Haynes, invested $250,000 to construct the new showroom and service department at 4301 Shelbyville Road.
The remodeled facility, which conforms to an architectural look prescribed by Lincoln Mercury, was required by the automaker in order for Blue Grass to qualify for Lincoln's Premier Experience Dealership and Mercury's Advantage Dealer designations, Vine said. The designation was created by Lincoln Mercury to recognize dealers who meet certain customer-service criteria.
The general contractor for the gallery, which Vine said is one of only 10 of its kind in the country, was Louisville-based Cardinal Insulation.
Lincoln Mercury division president optimistic
Hazel said that he is excited about helping to dedicate such an exclusive project.
But for the man who was chosen in August to lead the Lincoln Mercury division, the trip is more than a symbolic gesture.
Fueled by declining sales, speculation about Lincoln Mercury's demise has abounded since Ford announced a major shakeup of executives and products in January. However, Hazel is coming to Louisville with a resounding message — Ford's Lincoln Mercury division will be around for a long time to come.
"The history of Lincoln Mercury is long, and the division has encountered many fluctuations in the marketplace," Hazel told Business First in a telephone interview from his office in Irvine, Calif.
"However, we do believe that Lincoln and Mercury are valuable assets and that the two are interdependent," he added. "We are making strides to redesign and release new products, and while we know we are on the right path, we also know that we have a long way to go."
Hazel said that the new Blue Grass facility is an affirmation that the Lincoln Mercury division is on solid ground and that Ford executives view the division as being important to the vision outlined by Ford chairman Bill Ford Jr. earlier this year.
"We certainly wouldn't ask a dealership to make the kind of investment that the Vine dealership did if we didn't expect to be around for the long haul," Hazel said. "That facility is an acknowledgment that to be competitive, you need to be customer-focused and put your best foot forward."
September sales figures released by Ford show that Lincoln sales for the month were 12,968, up from 9,418 in Sept. 2001, fueled by sales for the redesigned Town Car (up 26 percent) and Navigator (up 27 percent).
The Lincoln LS was up 68 percent, and the Continental was up 9.8 percent in September compared with a year earlier.
Mercury showed a 27.2 percent sales increase in August 2002 over August 2001. But September of 2002 was less favorable, when sales declined 25 percent compared with September 2001.
In August 2002, Mercury sales were spurred by the Mountaineer sport utility vehicle, which set a new August record with 4,811 units sold, up from 4,394 a year earlier. Also, Mercury moved 14,980 Sables in August, up from 6,990 a year earlier.
The upward trend continued for the Mountaineer in September, as Mercury sold 4,643 units, up from 2,860 in September 2001. However, the Sable didn't sell as well. Mercury sold 5,436 units, down from 10,853 in September 2001.
For the first nine months of the year, Lincoln sales declined 5.9 percent to 114,312 from 121,428, and Mercury sales fell 11.5 percent to 205,841 from 232,539, over the first nine months of 2001.
According to August 2002 sales figures released by Greater Louisville Automobile Dealers Association Inc. (GLADA), local Lincoln dealers sold 250 units for the first eight months of 2002, down 22.1 percent from the same period in 2001. August was a strong sales month for Lincoln locally. Dealers sold 47 units, up from 38 units in August 2001.
During the first eight months of 2002, local Mercury dealers sold 457 units, down 14.7 percent over the same period in 2001.
Mercury sales fell to 63 in August 2002 from 86 in August 2001.
Haynes said Blue Grass posted record sales in August. He added that Lincoln sales have been strong partly because of special financing offers and redesigned products.
As for the slumping Mercury sales, he said they can be partly attributed to a decline in product offerings by the automaker.
"We have the utmost confidence that as new products are introduced, those sales will pick back up," Haynes said.
Working on innovation
Hazel said Ford and the Lincoln Mercury division are working hard to develop new and innovative vehicles that will bring some life back to the brands.
"We have changed the Town Car, the LS and the Navigator on the Lincoln side and are releasing a new Grand Marquis on the Mercury side," he said.
Hazel also pointed to the Lincoln Aviator, a midsize luxury SUV, and the Mercury Marauder, a 302-horsepower muscle car spin-off of the Grand Marquis, as other new product rollouts aimed at helping the division bring back some of the hype of yesteryear. "We are proud of how these changes are being received," Hazel said. "But at the same time, we know we are a long way from reaching our potential."
Analyst: New identity, products needed
Joe Barker, manager of North American sales analysis for CSM Worldwide, said that in order for Lincoln and Mercury to become a force in the auto industry, they are going to have to catch up with the times.
Based in Northville, Mich., CSM Worldwide provides automakers and component manufacturers with production forecasting and analysis of industry trends and issues.
"Mercury suffers from a major identity crisis because they have spent so long in the shadow of their Ford counterparts," Barker said. "You can go to a Ford dealership and get just about the same version of everything produced by Mercury."
Barker said Mercury will roll out new products in the coming months, but they may not gain much attention because Ford will have identical models.
On the Lincoln side, the outlook is brighter because of Lincoln's competitiveness in the luxury SUV market, where a redesigned Navigator and a soon-to-be-released Aviator are generating some attention. However, for the brand to flourish, Barker said, Lincoln needs to make a foray into the luxury SUV crossover truck market to compete with General Motors Corp.'s Cadillac Escalade EXT.
The Escalade EXT has a panel behind the second-row seat that allows it to be converted from an SUV to a pickup truck.
Barker said Lincoln also needs to revamp its lineup of luxury cars, which now includes stalwarts like the Town Car and the Continental. "The LS is gaining some attention, but products like the Town Car are old and outdated," Barker said. "To be competitive in the passenger luxury car market, Lincoln needs to make a lot of progress and come up with some new offerings because they are way behind."
Working with dealers
Hazel said one of the ways the Lincoln Mercury division hopes to increase profitability is by working with dealers to improve near-term sales.
"We want to achieve mutual profitability for the dealer body and for the company," Hazel said. "For the dealers, profitability is largely a function of retail volume, so we need to work with them to increase sales."
Blue Grass Haynes said Lincoln Mercury has tried to help the dealers through offering different incentives and by redesigning some of the key Lincoln products.
He said he expects Mercury to do the same in the coming months and years.
"We have total confidence in the ability of Ford Motor Co. and Lincoln Mercury to come up with a product plan that will give us a good return on our investment," Haynes said. "If we didn't have that confidence, we wouldn't have made the investment."