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Old 01-04-2004, 19:29   #1 (permalink)
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Lincoln still in search of its soul Needed: Products, styling, identity

By Amy Wilson
Automotive News / January 04, 2004

DETROIT - Lincoln executives are wrangling over whether to adopt radical or reserved styling as they develop a lineup aimed at reviving the brand.

Despite Ford Motor Co.'s financial troubles, executives promise five new or redesigned Lincolns in the next four years. Plans include a pickup, a sport wagon and new sedans. All-wheel drive will be used widely.

But Ford Motor's problem child still has many unanswered questions, such as the styling. Uncertainties also remain in Lincoln's product cycle, and a strained budget is shaping the brand's future. Lincoln has fallen behind domestic rival Cadillac in sales, new products and buzz.

Ford Motor executives say Lincoln won't compete with the resurgent Cadillac on vehicles priced above $55,000. Instead, Lincoln will focus on the lower end of the luxury segment, where it can introduce vehicles based on the Mazda6 platform.

Lincoln Mercury President Darryl Hazel acknowledges some of Lincoln's stumbles. But, he says, the division is clarifying its lineup This week's Detroit auto show will highlight:

# The Lincoln Mark LT pickup, a version of the Ford F-150 that is scheduled for production.

# The Lincoln Aviator, a sport wagon that will replace the current Explorer-based vehicle. It will be one of two new Mazda6-based Lincolns headed for the showroom.

# The Mark X concept, which is a reskinned Ford Thunderbird and a possible styling template for the brand. Production isn't certain.

But what Lincoln isn't saying in Detroit also is telling. At one point late in 2003, executives had considered using the Detroit show to talk about plans for a rear-drive flagship sedan. That plan remains in flux.

Although the car will stay in the product cycle, planners haven't determined its production schedule or platform. The decades-old Panther platform, used for the Lincoln Town Car, Ford Crown Victoria and Mercury Grand Marquis, is a finalist. The flagship probably will be in addition to the Town Car.

Flagship conundrum

Last April, Ford product development executive Chris Theodore said the flagship would be based on the LS platform. But the company scrapped that plan because the LS mechanicals are too costly, a Ford insider says.

The flagship also will miss the production deadline Theodore set last year. He said then that the flagship would be on the market by about mid-2006. Hazel acknowledged in December that the timetable has slipped.

Planners refer to the flagship as the Continental, a storied Lincoln nameplate. But Lincoln officials say the revival of the Continental name is not certain.

In addition to the Panther platform, Hazel says Lincoln is considering a front-drive platform with all-wheel-drive capability. That is probably the platform developed for the new 2005 Ford Five Hundred sedan.

The choice may come down to whether engineers can develop an efficient awd option for Panther, but industry watchers are skeptical about a 25-year-old platform in a flagship luxury sedan.

"I can't imagine," says Mike Wall, an analyst with CSM Worldwide in Farmington Hills, Mich. "When you start talking about the things those buyers want to see - handling, electronics - I don't know how flexibly that platform is going to be able to accommodate that. It would be cheap, but it's a pretty outdated platform."

Design theme

The Lincoln look is another quandary in Dearborn.

J Mays, Ford Motor's group vice president of design, says he envisions future Lincolns adopting the 1960s-inspired front end of the Mark X concept. In particular, the show car's egg-crate grille, a look that premiered on the 1961 Continental, gradually will become Lincoln's face. The waterfall grille on today's Lincolns eventually will go away, he says.

But Hazel, president of Lincoln Mercury, says Lincoln styling should go further.

"We need revolutionary change with Lincoln, as opposed to evolutionary change," Hazel says.

Mays may like the Mark X look, but "I think that he could keep working on it," Hazel says.

Mays has authority on design issues. And more styling work will come for Lincoln, he acknowledges. Lincoln's makeover is the top priority charged to Peter Horbury, Ford Motor's incoming head of North American design. Horbury, experienced in the luxury segment, transformed Volvo's look from boxy to stylish.

New products

Lincoln desperately needs a fresh start in the product area.

The ill-conceived Blackwood pickup was dropped in September 2002 after barely a year and meager sales of 3,356.

With a high price and similarities to the Lincoln Navigator and Mercury Mountaineer, the Explorer-based Aviator SUV got off to a slow start, though sales have improved recently.

A lukewarm reception welcomed the redesigned 2003 Navigator, re-engineered 2003 Town Car and re-engineered 2003 LS, all of which experienced only minor styling changes.

"It was a helluva strategy," Hazel says, "but the execution left a lot to be desired."

The current plan clearly is constrained by a tight budget, with extensive platform sharing among Ford Motor's brands. The key points:

# The 2006 Mark LT pickup is based on the redesigned F-150. It will arrive as early as January 2005.

# The next-generation Aviator is based on the Mazda6 platform, which will underpin up to 10 Ford, Lincoln and Mercury vehicles. The next Aviator is expected to arrive in the second half of 2006. It finally will put Lincoln into the luxury crossover market.

# A mid-sized sedan also is based on the Mazda6. This car, a sibling to the 2006 Ford Futura, will feature all-wheel drive and will be Lincoln's entry-level car. It will be smaller than the rear-drive LS. The fate of the LS is not clear.

Cadillac assault

Lincoln's retail sales rose 8 percent, and total sales jumped by 6 percent through the first 11 months of 2003. But Lincoln's gains are explained by its new Aviator, which is outselling the departing Continental sedan and Blackwood pickup. Through November, Lincoln sold 143,950 vehicles and will finish the year well below its high of 193,009 in 2000. After losing the luxury sales crown to Lincoln in 1998, Cadillac is once again thumping Lincoln in sales and buzz. Cadillac sold 194,028 vehicles in the first 11 months of 2003.

While Lincoln was sidetracked by moves to and from Southern California and into Ford Motor's Premier Automotive Group, Cadillac was developing distinctive rear-drive vehicles and gutsy design concepts. The GM division's ambitious $4 billion revival plan is unfolding rapidly.

Lincoln's own pricey plan, developed under former PAG chief Wolfgang Reitzle, was scrapped when financial crisis hit Ford Motor in 2001.

The Reitzle plan ignored Mercury. Lincoln Mercury dealers, who rely on the volume generated by both brands, objected. The new plan better balances new product investment: Five new or redesigned Mercurys will join the five new or redesigned Lincolns by 2008.

But Lincoln dealers also want products that compete head-to-head against Cadillac, says George Benson, chairman of the Lincoln Mercury National Retailer Council and dealer principal of Benson Lincoln-Mercury in suburban Pittsburgh.

That doesn't seem likely.

Ford product development chief Phil Martens says, "We don't have to have in the Lincoln portfolio a $75,000 XLR, a $60,000 SRX, a $50,000 CTS," referring to Cadillac's new entries. "That's pretty rarified air. And we think where Lincoln plays is about in the price range it's in today. It's between $30,000 and $55,000, and there's a lot of market there."

Lincoln's sweet spot will be $32,000 to $40,000, Hazel says, because that is where the volume is. And more volume is crucial to Hazel's plan to almost double Lincoln Mercury's retail market share.

The division held 1.7 percent of the retail market through the first 11 months of 2003, according to the company. Lincoln Mercury's total share of the U.S. market, including fleets, was 2.2 percent through 11 months, down from 2.5 percent in the previous year.

Says Hazel: "We have to be larger than a 2 percent (retail market share) operation in the long term. For our dealer viability and profitability, for our own viability and profitability, we need to at least get into the threes, if not higher."
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