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Old 07-03-2003, 06:54   #1 (permalink)
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United States :Once No. 1, Lincoln now searches for its identity

By Earle Eldridge, USA TODAY

Lincoln has been a leaders' car, chauffeuring every U.S. president from Franklin Roosevelt in the 1930s to George Bush in the early '90s. It has been the brand of choice for sports and music stars.

As recently as 1998, Lincoln was the No. 1-selling luxury brand in the USA.

But now the president uses a Cadillac, the stars have switched allegiances, regular buyers have drifted away and Lincoln has fallen to No. 6 among posh nameplates. The glory days for Ford Motor's venerable luxury brand seem longer ago than five years.

Lincoln's rise and fall illustrates the problems an old-line, domestic luxury brand faces battling aggressive rivals that have a head start because they already appeal to younger buyers. It's also a cautionary tale about the results of losing management consistency and marketplace focus.

"This is a great American marque that has floundered," says Matt Stone, executive editor of Motor Trend magazine.

It's easy to blame Lincoln's troubles on intense competition, and Lincoln brass does just that.

But even with minimal competition, Lincoln would have had a rough go.

It's had three bosses in three years, each with a different vision. It moved its headquarters to California to get hip, then retreated to Detroit to get serious. It was included in Ford's Premier Automotive Group with Volvo, Jaguar, Land Rover and Aston Martin, then got kicked out.

And it was in line for $2 billion to develop knockout cars and trucks but wound up with just $250 million after Ford suffered huge losses in 2001.

The heartbreaking part for Lincoln and its fans is that in 1998 and '99 the brand was on a roll.

In '98, it launched the Navigator, a big, gaudy sport-utility vehicle based on the Ford Expedition SUV. Navigator was a home run, appealing to pop-culture trendsetters as well as to ordinary SUV fans ready for something bigger, smoother, more luxurious. It helped boost Lincoln to No. 1 among luxury brands. Most important, 60% of Navigator buyers had never owned a Lincoln.

Earnings were high, up to $18,000 gross profit per unit, according to some estimates, because Navigator piggybacked onto the Expedition, itself derived from the Ford F-150 pickup, and avoided hundreds of millions of dollars in investment that goes with developing a model from scratch.

In 1999, Lincoln launched the LS sedan as a 2000 model. Co-developed with the Jaguar S-type, LS had a European flavor and American details. It seemed to prove that Lincoln could build a sport sedan to rival BMW, Lexus and others. A healthy 70% of LS buyers were purchasing their first Lincoln.

The Navigator and LS also brought younger buyers. The average LS buyer is 51, and the average Navigator buyer is 50. Average buyer of a Town Car, Lincoln's top-selling model, is 70.

But after the two successful launches came — nothing.

"The window of opportunity that opened for Lincoln when it successfully launched the Navigator and then the LS has closed," because Lincoln didn't follow up with exciting products, says Susan Jacobs, a marketing con******t specializing in luxury vehicles.

Moving on

Tired of waiting for the next neat Lincoln, entertainment and sports stars — who influence tastes well beyond young consumers — defected to the Cadillac Escalade SUV.

Slick models such as MK 9, Continental Concept and Navicross that Lincoln has displayed at shows could revive the brand, but nothing's due before the 2006 model year and Lincoln won't say what models are first. In the meantime, Lincoln will try tweaking current models — a supercharged, hot-rod Navigator and a Town Car with tauter suspension are possibilities — and continue discounting to survive the drought.

Lincoln officials say the brand has struggled as competition has increased. Lincoln annual sales have fallen nearly 20% to 150,057 in 2002 from the recent high of 187,121 in 1998. Through June this year, Lincoln's truck models and strong demand for luxury models generally have pushed it to an overall sales increase of 6.2% from the first half of last year, in a luxury market up 5.7%.

Lincoln's newest president is Darryl Hazel, a 31-year veteran at Ford. He took the job in August 2002. His background in parts, marketing and customer service and his good relationship with dealers should help smooth dealer concerns about Lincoln's uneven past and shaky future.

Hazel replaced Brian Kelly, who was hired from outside the company and had no previous auto experience. Lincoln dealers were skeptical that Kelly, a computer whiz, had the necessary experience. He lasted only nine months.

Kelly had replaced Mark Hutchins, who retired in 2001 after 37 years at Ford. Hutchins helped devise the plan calling for investing $2 billion on products that would wrench the brand away from its septuagenarian audience. Older buyers — bluntly — won't live long enough to buy very many second and third and fourth Lincolns.

Targeting younger buyers

Hazel says his focus now is to make Lincoln attractive to younger buyers and to minimize less-profitable sales to fleet buyers. But he says the company needs more youthful products to compete, and nothing's in the pipeline until the 2006 model year.

The successes of the Navigator and LS were followed by the failure of the Blackwood, a takeoff on the Ford F-150 crew cab pickup. The $50,000-plus truck had a carpeted pickup bed with a powered lid that made it more like a car trunk.

Lincoln expected to sell 11,000 Blackwoods in 2002 but sold only 3,066. It was pulled from the market after only one model year.

Lincoln dropped its Continental front-wheel-drive sedan last year. The Continental name had been in the lineup since 1940 and was one of the longest-lived models around. Sales had fallen to about 15,000 last year from a high of about 64,000 in 1989.

In November, Lincoln began selling the Aviator midsize sport utility, based on the Ford Explorer. After a slow sales start, Lincoln offered a $3,000 cash rebate or zero-percent financing for 60 months. Sales improved.

Critics say the Aviator too closely resembles the Navigator and a loaded Aviator's $50,000 price is too close to the bigger Navigator's.

'Behind the times'

Aviator is also based on a truck when the most popular luxury SUVs are the so-called crossovers based on carlike chassis, such as Lexus RX 330 and Acura MDX. Marketing con******t Jacobs says Lincoln's "product initiative is way behind the times."

About three years ago, Lincoln had pinned its hopes on an expensive plan to develop rear-wheel-drive, high-performance luxury cars with sporty attributes, following the lead of the LS sedan. Coupes and convertibles were to be part of the new Lincoln, which was to have as many as eight models in the lineup, double the four-product lineup today.

Lincoln also was to be part of Ford's Premier Automotive Group, picking up breeding and cachet from associating with Ford-owned elite brands Volvo, Jaguar, Land Rover and Aston Martin.

J Mays, Ford vice president for design, hired Briton Gerry McGovern in 1999 to lead a design team to bring the new Lincolns to life.

McGovern tapped engineers, designers and marketers from competitors including BMW, Audi, Saab and Volkswagen.

But budget cutters, stung by Ford's $5.4 billion loss in 2001, slashed Lincoln's development money, leaving $250 million where $2 billion once was. That delayed and eliminated products. The first of those could have been ready about now.

By April 2002, Lincoln was taken out of the Premier Automotive Group. Ford executives determined that without huge development money, Lincoln could never truly compete against BMW, Mercedes, Audi, Lexus, Infiniti and Acura. So Lincoln was redirected to compete in the USA against Cadillac. In November, it said goodbye to the Irvine, Calif., Premier Automotive Group campus and has returned to the suburban Detroit home of Ford's North American operations.

Lincoln also lost its design team recently. McGovern moved back to England to lead Ford's Ingeni design studio in London. Without Lincoln-only designers, the brand will have to stand in line for other Ford designers' time and attention and will mainly have to restyle other Fords rather than crafting unique Lincolns.

Other luxury brands, including Cadillac, rely on dedicated designers to make their vehicles more distinctive from the other corporate brands.

"Lincoln's designs have become institutionalized and methodical," says Gary Vasilash, editor-in-chief of Automotive Design & Production magazine. "If Lincoln is not going to compete in design, maybe they should compete in technology."

Lincoln now is scheduled to get a new rear-wheel-drive sedan and two all-wheel-drive models, but they won't be ready before 2006.

Married to Mercury

Lincoln also is tied at the hip to Mercury, a brand that's having its own troubles establishing a strong identity. Under the Ford Motor system, dealers have Lincoln-Mercury franchises, not one or the other. No other luxury nameplate has such a marriage, and some say it diminishes the uniqueness sought in elite brands.

Two years ago, Ford allowed a Colorado dealer to separate Mercury from Lincoln and to group Lincoln with the other Ford Premier Automotive Group brands on one lot in connected showrooms. His Mercury franchise was moved to another lot.

"It has given the Lincoln brand more prestige," and Lincoln sales improved, says Beau Smith, general manager at Still-TerHar Motors in Broomfield, Colo., near Boulder.

"In a metro area, you can have one brand and do very well, but in a rural area, you need both brands," Hazel says, explaining that despite the Colorado experience, Ford has no plans to split the brands.

Mercury affiliation, new-model drought, budget woes and management churning aside, Hazel is upbeat: "We do believe in the long-term viability of our Lincoln brand."
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Old 07-03-2003, 12:30   #2 (permalink)
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Re: United States :Once No. 1, Lincoln now searches for its identity

This is another product line that would have benefitted so much from increased horsepower. And, tell me that today's LS would not be selling more units if consumers had the Cobra engine as a choice. FMC, it's not too late....yet.
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Old 07-03-2003, 12:38   #3 (permalink)
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Re: United States :Once No. 1, Lincoln now searches for its identity

Yeah the LS would sell more if they had a detuned Cobra engine in it. You know that Ford would not allow the LS to out play its SVT Cobra.

Maybe SVT should start doing Lincolns. Now that is an interesting thought.
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Old 07-03-2003, 19:08   #4 (permalink)
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Re: United States :Once No. 1, Lincoln now searches for its identity

With an automatic and some extra weight there'd be little challenge to the Cobra; but even so, FMO can't afford to lose this share of the market.

Last edited by Paul Vincent; 07-04-2003 at 09:03.
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Old 07-03-2003, 19:25   #5 (permalink)
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Re: United States :Once No. 1, Lincoln now searches for its identity

It would be a shame, yet I do see it happening. Especially the way that the current US climate is with US Built cars.
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Old 07-03-2003, 23:18   #6 (permalink)
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Re: United States :Once No. 1, Lincoln now searches for its identity

I think one of the problems is, these cars are aimed at older folks. Nothing wrong with that at all. But, Ford needs to start aiming at the younger crowd as well. Lincoln needs make a sports rodster and a convertible option for the LS8. Thats my opion.....
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Old 07-04-2003, 09:05   #7 (permalink)
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Re: United States :Once No. 1, Lincoln now searches for its identity

Stacy94PGT, If we can figure it out, what's keeping FMC from getting it?
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Old 07-04-2003, 09:54   #8 (permalink)
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Re: United States :Once No. 1, Lincoln now searches for its identity

Good question Paul. I wish someone from the Lincoln Divison would come on here and answer some of these questions.
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Old 07-04-2003, 22:05   #9 (permalink)
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Re: United States :Once No. 1, Lincoln now searches for its identity

I can tell you for a fact that FPG has picked up the LS portfolio, so it will be interesting to see what they do with the car.
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