Cue the cheesy theme music and hammy narrator …

Deep inside the bowels of Ford Motor Co.'s world headquarters, the storied automaker's sharpest minds are in a dither. For with each passing day, the news is increasingly dreary. And every dispatch arrives like a punch from an arch nemesis.

Dwindling market share. Wham!

Declining truck profits. Biff!

Waning consumer confidence. Thwump!

Desperate, the brain trust summon their most formidable, albeit untested, weapon — the Premier Automotive Group (PAG).

Can these one-time low-volume brands rescue the flagging Ford empire? Or is it too late?

There's nothing comical about these questions. Just ask Merrill Lynch analyst John Casesa who was so intrigued by Ford's aggressive foray into the luxury vehicle market he co-authored an exhaustive report for would-be investors subtitled, “Ford's biggest idea.”

“I got very interested in this strategy,” Mr. Casesa says of PAG. “It is a big, big deal.”

And he's not alone in his thinking. Says Jim Gillette, auto analyst with IRN Inc., “Normally, I'm pretty negative on the Big Three. But I've got to tell you, the best strategy that's going out there among the Big Three is that Premier Automotive Group. … Each individual brand has a very clear definition of what they're trying to do and the target audience they're going after.”

And together, PAG brands Aston Martin, Jaguar, Land Rover, Lincoln and Volvo have the potential — by 2005 — to increase Ford's automotive pre-tax margins by 13%, says the Merrill Lynch report. That's an estimated $2.5 billion.

Consequently, Mr. Casesa says, PAG is more important than any other single Ford endeavor. More than cost-cutting. More than e-business.

“It's more visible to us as investors. More quantifiable. … And it is related to what Ford knows how to do.”

Which is, he says, making cars and trucks.

But in an increasingly difficult climate marked by fuel price worries and general penny-pinching, is it reasonable to expect any brand to perform heroic deeds in the luxury market? Especially a tired champion such as Lincoln, a PAG stalwart?

During the first eight months of the year, luxury car sales declined 7.8% compared to the same period in 2000 — underperforming the overall car market by nearly a percentage point.

And swirling about in this vortex are PAG members Jaguar, Land Rover and Lincoln.

Volvo and Aston Martin have, so far, escaped the downward trend.

Compared to the first eight months of last year, Lincoln sales are down 16.7%. Jaguar, arguably PAG's shiniest star, is down 10.1%.

And Land Rover is in a 7% slide.

Buoyed by introductions of its S60 sedan and V70 XC, Volvo sales are up 3.6%. While Aston Martin's models are sold out, its low volumes — fewer than 1,500 units scheduled for 2002, worldwide — won't significantly bolster PAG's bottom line.

(Just how little the latter affects the books is evident when an Aston Martin insider offers a proverb in place of financial information. “A gentleman never counts his change in public,” he says.)

While this year's declines are measured against the best year in industry history and, month-over-month, Jaguar, Volvo and Land Rover have posted brand-best performances more than once, PAG's arch-rivals continue to pull away.

Mercedes-Benz USA is maintaining 2000's record pace with a January-through-August sales hike of 0.6%. Lexus is up 11.3% and, continuing a month-to-month course of improvement that harkens back to 1998, BMW's year-to-date sales are up 10.7%.

In the comics, this is where the protagonist's fate seems grimly certain.

The fight seems over. But suddenly, a chink is discovered in the competition's armor.

And in this case, it's big enough to drive a sport/utility vehicle (SUV) through. Or at least a crossover/utility vehicle (CUV). From January to September, luxury CUV sales climbed 69.5% compared to same period last year — 126,747 units from 74,768. Lexus RX 300 leads the pack, pushed hard by BMW's X5, despite the latter's nine recalls.

But PAG is poised to rush the utilitarian luxury segments with at least three products — one each from Lincoln, Volvo and Land Rover. They are Aviator, V90 and Freelander, respectively.

Of Aviator, Lincoln Brand Manager Mike Crowley says: “It's very important because, right now, Navigator has attracted a lot of customers to the segment.”

Due out next year as an '03 model, Aviator — smaller than Lincoln Navigator — will come off Ford's U152 platform — source of Ford Explorer and Mercury Mountaineer.

“There's a lot of opportunity,” Mr. Crowley adds. “As when Navigator first came in, there's kind of a sweet spot (in the market.)”

Noting the introduction of Blackwood, praised for its ride though mocked for its lack of utility, Mr. Casesa confesses skepticism about Lincoln's passenger car business. “Maybe they should be an American luxury truck brand, or something,” says the analyst.

Bunk, says Mr. Crowley.

“Yes, we've got some strengths in trucks … but I wouldn't say that's the total scope of the package for Lincoln. We've got Town Car as well. I think you're going to see Lincoln continue to grow around the LS.”

However, Continental is expected to vanish, or at least take a hiatus.

Meanwhile, Volvo — having punched a hole in the CUV segment with this year's launch of Cross Country — readies the second wave of its 1-2 combination. The V90 is based on Volvo's Adventure Concept Car (ACC).

“Whether they're fast enough, that's another story,” Mr. Casesa says.

Of the luxury CUV market, PAG Executive Director Victor Doolan says: “I'd like to think Freelander started the whole thing.”

Launched in Europe four years ago, the car-based “baby” Land Rover overcame quality doubts to become that continent's top-selling utility vehicle. Stickered under $25,000, it is scheduled to debut here in December with predicted annual sales of 20,000 units.

Where does this leave luxury cars? Incredibly, still in the running according to long-term trends.

“People are getting older and richer,” the Merrill Lynch report says.

Census bureau statistics show the number of people between the ages of 45 and 64 — “prime range” for luxury vehicle purchases, according to the investment house — is expected to approach 80 million by 2010, a 33% increase from today's total.

And historically, Merrill Lynch says, the luxury market is more resistant to economic swings than the overall market.

“In the U.S. the luxury market was less cyclical in both the 1980s and 1990s downturns,” the report says. “Luxury sales grew despite an 8% decline in the total market from 1980 to 1982. In the early 1990s, luxury again outperformed with flat sales in a declining overall market.”

Land Rover Chairman and CEO Robert Dover begs to differ. He was at Jaguar then and recalls when sales there fell by half when the last decade began.

“What you can say is, when there is a recession, the premium products tend to go into the recession late, and come late out of the recession,” Mr. Dover says.

Notably, the Gulf War occurred during the second downturn. Reluctant to make predictions, industry watchers are adopting a wait-and-see attitude with regard to whatever actions arise from the terrorist attacks in the U.S.

One thing is certain, however. Jaguar will stick with cars because PAG already has a Jag-caliber SUV. “It's called Land Rover,” says spokesman Jeremy Barnes.

Product diversity in sufficient numbers — without overlap — is the source of PAG's power, says Wolfgang Reitzle, group vice-president. “A fleet that is united, instead of a battle ship,” he says.

And the fleet's numbers have been growing. Ford's total luxury volume went from about 200,000 vehicles in 1997 to more than 800,000 last year. Projections call for totals approaching 1.4 million before 2005.

Jaguar should have a significant share of that total, says Mr. Gillette, adding the pending introduction of F-Type bodes particularly well.

“I think it's going to take 5 to 10 years before they can approach the level of a BMW or a Mercedes,” he says.

And while Mr. Gillette acknowledges Jaguar might never catch up, he claims Jaguar X-Type already has BMW worried. The Germany-based automaker will make many 3-series options standard equipment next year, he says.

“That kind of irks me because I have a 2001 3-series, and I paid for the steering wheel and everything.”

Market forces are likely the most formidable foes PAG members face as they roll out new product in a bid to boost Ford's fortunes and challenge Mercedes as the world's top luxury auto producer. Worldwide, PAG capacity trails that of Mercedes by about 200,000 units. But it leads BMW, albeit by fewer than 70,000.

Internally, Ford's will to see PAG succeed appears unshakeable. As Ford President and Chief Executive Jacques Nasser formulates a new global cost-cutting plan that could result in plant closures, a source tells Ward's PAG is not believed to be on the chopping block. That's not surprising because Mr. Nasser is to PAG what Jor-El is to Superman — a father figure and visionary.

Meanwhile, Mr. Reitzle has been the Man of Steel in Dearborn where he's been busting down doors to ensure PAG gets the resources its needs. Lincoln, for example, has, for the first time in 50 years, its own designers and engineers.

“Before, we were usually grouped in vehicle teams that had Ford and Mercury and Lincoln in the same groups,” he says.

“With the sharing of ideas and experiences with somebody like Wolfgang Reitzle at the head,” Mr. Crowley adds, “he keeps us dedicated to the issues of how to build the brand, long-term — the products, process, distribution, all that stuff. He's done it, knows it and is extremely passionate.”

The word “uncompromising” is also heard whenever the former BMW executive's name is raised. But in what context?

Says one insider: “Uncompromising in terms of quality. That's all I'm going to say.”

Ford's flow chart was recently redrawn, uniting the North American operations of Jaguar, Land Rover and Aston Martin — arguably PAG's superheroes. But executives deny the move relegates Lincoln and Volvo to sidekick status.

“It's to have three very clear businesses within PAG, as opposed to disparate brands,” says Mr. Doolan, who's also acting president of Volvo Cars North America.

He adds, “What you've got is American luxury, which is Lincoln. Volvo is our Swedish brand and can stand on its own two feet. And Jaguar, Land Rover, Aston Martin — also powerful brands, but totally complementary — represent British at its best. Three very clearly distinct corporations within PAG.”

As they say in the comic books, “to be continued …”

The Fantastic Five

With apologies to Marvel Comics, meet the Premier Automotive Group:

The Hulk (Land Rover) — Intrepid and brawny. Acquired by Ford in March of last year. An institution in Europe, particularly the U.K., for 50 years. Recently sold its 200,000th vehicle in North America. Key product: Freelander. Weakness: Quality.

Thor (Volvo) — Master of self-defense … and a Scandinavian. Acquired in 1999. Undisputed world leader in safety engineering and PAG's high-volume brand with an objective of 200,000 unit sales in the U.S. Key products: S60, XC. Weakness: Emotionless styling challenges categorization as a true luxury car.

Black Panther (Jaguar) — Sleek, strong … and the only relevant superhero with a feline persona. Acquired in 1989. Considered PAG's brightest potential star because of dramatic quality improvements and volume increases. Key product: X-Type. Weakness: Trend toward CUVs could hurt sales.

The Human Torch (Aston Martin) — Muscular and sexy. Acquired in 1987. Considered Ford's technology innovator. Key product: V12 Vanquish. Weakness: Exclusivity results in low public profile. … OK, no real weakness.

Captain America (Lincoln) — Stylish guardian of “American luxury.” Acquired in 1922. Emerging as top luxury truck brand. Key product: Aviator. Weakness: Stodgy image.