Changing Trajectory: In Giving Lincoln Its Own Space, Can Ford Combat the Wandering Eye?
My father has historically been a Ford man. Despite numerous forays into Chevrolet, Chrysler, Volkswagen and Toyota, he has always returned to the Blue Oval when the time came to purchase a keeper. Other nameplates came and went, receiving slightly less attention, but there was always at least one well-maintained Ford in the garage. As a result, I became familiar with dealerships using the suffix “Ford Lincoln Mercury” at a very young age.
For me, it was an opportunity to ogle the fancier sedans my father claimed didn’t make financial sense. “It’s the same car,” he would always say. “This one just costs more.”
When you’re eight and have nothing to distract yourself with other than the swizzle sticks you stole from the coffee area, fatherly advice has a way of sinking in. I’ve often wondered why automakers would even dare place their premium offerings so close to their less-expensive models. But times have changed.
It’s much harder to accuse Lincoln of providing badge-engineered models these days. Even if vehicles do share the same bones, Ford’s luxury arm is doing more to ensure its offerings are no longer “the same car” for more money. It’s trying to temp customers with more tech, power, and lavishness. This is a decided effort on the part of the manufacturer, as Ford is not interested in the possibility of Lincoln following Mercury into the automotive hereafter.
Unfortunately, finding the correct balance has been difficult. Ten years ago, Lincoln was circling the drain. Domestic deliveries were at an all-time low and market share had been dwindling for some time. Back then, the brand was taking a page out of Cadillac’s book and pushing alphanumeric models like the MKZ, MKS, and MKX as the new hotness. But it wasn’t working — sales stabilized but the brand continued losing its share of the market for a few more years.
With things finally starting to improve, even though 2018 could have been better, Lincoln has attempted to take stock of what works. Clever marketing has assuredly improved the brand’s image but we’d argue that it’s the much-improved designs that are making the most difference. Ford’s luxury division seems set on setting itself apart, something the manufacture has attempted to replicate in the showroom.
While this has manifested into a few isolated boutiques serving as tasteful lounges intended to intrigue the right sort of shopper, Ford is also interested in having dealerships establish standalone Lincoln stores. Known as the “Lincoln Commitment Program,” the idea stalled in December after blowback from dealers concerned that the cost of modifying their stores wouldn’t be offset by luxury sales.
Ford has since reintroduced the idea with some alterations designed to make it more palatable. According to Automotive News, brand executives, working closely with the Lincoln National Dealer Council, have made the program more flexible, offering participating dealers a choice on how big a showroom they’re allowed to build. They’ve also abandoned affixing store size to market location and softened the margin withheld from dealerships who don’t separate Lincoln and Ford zones by 20 percent.
From Automotive News:
The brand is asking dealers to build showrooms that adhere to its new design theme known as Vitrine, a French word for a glass display case. The exterior of each store is defined by floor-to-ceiling glass windows that illuminate the vehicles inside at night.
Dealers have the option to build a two-vehicle boutique or a four- or six-vehicle showroom. Even the smallest boutique will cost millions of dollars, according to a source with knowledge of the requirements.
According to a memo to dealers viewed by Automotive News, Lincoln is asking for a $20,000 enrollment deposit by Feb. 1 that will be reimbursed once the project is certified.
Dealers can also earn margins of up to 2.75 percent per vehicle sold if they adopt the new layout. While that’s less than Ford’s original offer of 3.5 percent (which the California dealer association opposed), stores can also earn payments tied to client experiences in addition to those awarded for the new facilities. Initially, that offer was reserved for retailers in the top 30 U.S. luxury markets. But it has now expanded to locations outside those regions, assuming they’re willing to physically separate the brands.
“I think Lincoln went a long way toward doing something that was fair to the dealer body across the board,” Tom Lynch, general manager of North Florida Lincoln in Jacksonville, Florida, told Automotive News. “I think they came out with something even better.”
Better for the dealer network, perhaps. But truly better for the brand and its customers? Lincoln says yes. Six dealerships have already opened new-and-improved Vitrine showrooms and the automaker anticipates ten more opening within the next year. It also claims that standalone Lincoln stores tend to fare much better in terms of sales, even those established before the new program’s conception.
“We value our dealers’ inputs and over the past several months we have listened and made a number of changes to the Lincoln Commitment Program that are reflective of their feedback,” Lincoln President Joy Falotico said in a statement. “We are now moving forward with the program and remain committed to brand-exclusive facilities as it is key to our brand transformation by addressing the needs of luxury clients.”
This brings us back to my father. Over the last eighteen months, he’s casually discussed the prospect of purchasing his very first SUV. Knowing he’ll eventually walk into a Ford dealership, I repeatedly asked him to at least examine what Lincoln had on offer — wondering if he might be happier in a Nautilus. He reported back to me over the weekend that he went with a Ford Explorer with a handful of options.
I asked him what he thought of Lincoln’s lineup. The answer? He said it was the best he’s seen in years, “But Ford was still literally offering me more car for less money,” he explained. “Besides, you know me. I’m a Ford guy.”
My late grandfather, a lifelong GM loyalist, former employee and Buick fanatic, did something nearly identical a decade earlier while cross shopping Cadillac. “I just didn’t see much sense in it,” was the reason given for his not treating himself to a Caddy.
While anecdotal evidence usually isn’t the best foundation to build a future upon, it certainly plays into Lincoln’s current strategy on this occasion. Men like my father and grandfather probably cannot be swayed by the glitz and glamor of a premium badge, even if that automaker is trying to make said badge mean something again. If that’s to be the case, perhaps it’s in Ford’s best interest to physically separate its marques — as there may be less customer overlap than previously assumed.
[Image: Ford Motor Co.]