With Mercury Out of the Mix, Ford Must Revitalize Lincoln

Now that Ford Motor Company has decided to wind down its Mercury brand, most analysts agree the challenge will be in building up the surviving Lincoln line to satisfy its customers and its dealers.  Ford’s president of the Americas Mark Fields said, “We have to make a very compelling case to our dealers very quickly.”

Although Lincoln has benefitted in recent years from new, more stylish designs, the brand is still widely considered an “also ran” among premium car brands in the U.S.

Winding down the Mercury brand will deprive Lincoln-Mercury dealers of sales which, last year, totaled 92,299, or about half those dealers’ total annual sales of both brands.

Edmunds.com analyst Jeremy Anwyl said Mercury customers have traditionally cross-shopped Ford vehicles, and he predicts the namesake brand will be able to retain about two-thirds of those customers. He also said that Lincoln’s future could be bright assuming it receives the same attention the Ford brand has in recent years.

Anwyl said, “Where Lincoln is today is where Ford was a few years ago. The staff that is working on Mercury will now shift to Lincoln. To me, that gets to the heart of the matter.”

Since arriving at Ford Motor Company in September 2006, CEO Alan Mulally has succeeded in getting the company to “focus with intensity on Ford as a brand,” said Anwyl, who predicts he will bring that same intensity to the Lincoln brand.

Despite the launch of new products, Lincoln has fallen behind other premium car makers in terms of actual sales and consumer perception. According to a new study by Edmunds.com, the percentage of U.S. new car buyers who would consider purchasing a Lincoln fell from 1.3% in May 2009 to 0.9% last month.  During the first five months of this year, Lincoln sales totaled just 37,444. Cadillac’s domestic sales during the same period totaled 52,997. Lexus’ U.S.  sales during the period reached 90,098 despite parent company Toyota’s recall troubles.

Compete Incorporated Managing Director Lincoln Merrihew says Lincoln needs a “game changer” – a Lincoln-only model that will grab consumer’s attention and establish the brand’s identity, in the same way the LFA sports coupe defined the Lexus brand. He said the model doesn’t even have to be a money-maker, but it does have to be “something very distinctive.”

For the short term, Ford is betting that new technologies like advanced powertrains, noise cancellation and retractable glass roofs will give Lincoln a competitive edge over the competition. Ford also plans to introduce its EcoBoost engine technology across the entire Lincoln model lineup.

Long-term, Ford plans to expand the Lincoln lineup. Over the next four years, Lincoln will receive seven all-new or significantly redesigned models. There is speculation they may include a small crossover, similar to the Kuga, or the Mondeo sedan, both of which are currently marketed overseas.

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