BEIJING, CHINA – Ford’s Lincoln brand has been struggling in the U.S. for more than a decade, but it now is looking to China’s surging luxury market as a new frontier where it can rebuild its former glory as a top premium brand.

Starting this fall, the automaker will introduce the MKZ midsize luxury sedan and the MKC, a small luxury cross/utility vehicle. They will be followed by the midsize MKX luxury CUV, an all-new fullsize luxury sedan and the Navigator SUV. Lincoln plans to have 60 stores in 50 Chinese cities by 2016.

It plans to establish a new retail and financing model called “The Lincoln Way” that strives to shift luxury-vehicle ownership from a strict sales-and-service model to one based on establishing a more individualized approach to serving customers. A key component will be futuristic dealerships that allow customers to view life-size digital displays of color and option combinations.

Can Lincoln elbow past Audi, Mercedes and BMW, which together control about 80% of the market? That’s not likely. But it has been researching the market for three years and even has built a prototype dealer facility in Shanghai to test and refine every aspect of a prospective customer’s journey through the purchase and ownership process. Offering the right products at the right time and taking advantage of changing buyer trends could at least put Lincoln on the map in a sector that may reach 3 million sales annually by 2020.

Read between the lines of recent statements by top Ford and Lincoln executives and they suggest the brand is not aiming to roll over the Mercedes S-Class or Audi A6, which rule the gridlocked roads here. Instead, it looks like Lincoln wants to capitalize on the increasing popularity of CUVs and SUVs to grab a slice of what soon will be the largest luxury pie in the world.

This strategy has worked before. In the late 1990s, Lincoln rejuvenated itself and raked in giant profits with one standout vehicle, the Navigator. It’s not impossible to envision a family of new, fuel-efficient luxury CUVs turbocharging Lincoln sales in China.

It’s certainly not hard for Ford CEO Alan Mulally to imagine. Ford sales in China were up 50% in 2013 and 45% in the first quarter of 2014 thanks in large part to strong sales of the Kuga and Edge CUVs.

When WardsAuto asked Mulally which of the Lincoln products would be the volume leader, he said “We’ll let customers decide.” But he then added: “When you think about small, medium or large SUVs, around the world, they are the fastest-growing segment.”

Of course, the Germans are introducing CUV models as well, but Lincoln is hinting that part of its strategy will be offering large, luxurious vehicles that are more financially accessible. “It’s about product and how product is delivered to the consumer,” says Lincoln China President Robert Parker. “We’re a bit larger than other products in the segment, so we think that gives us an advantage.”

Exploiting Changing Luxury Market Trends

A short walk in the heart of Beijing’s Dongcheng financial district explains a lot. It is a microcosm of the luxury market in this nation of almost 1.4 billion people. In just a few blocks are Gucci and Chanel outlets, at least two stores each for Rolex, Cartier and Hermes plus Aston Martin, Ferrari and Mercedes dealerships.

Only a tiny percentage of Beijing residents can afford to shop here, but with a population of more than 21 million, a tiny percentage of Beijing equals a lot of customers. Multiply this many times over with giant megacities throughout the country and you understand why China is, or soon will be, the largest global market for many luxury brands.

And there is all the more wiggle room because there are no indigenous brands to compete with. After decades of communist rule, China is not a petri dish for home-grown companies catering to the world’s wealthiest 1%.

“We have our own products but no luxury brands,” says Jacky Jin, vice principal of The Trends Academy, a Chinese consulting company.

Nevertheless, China’s surging middle and upper classes have developed a huge appetite for luxury. Wealthy Chinese consumers especially like European brands for their rich heritage.

“For a Chinese consumer, a good product must have a long history,” says Lily Liu, general manager of Lanvin China, a unit of the internationally known design house.

In China, history equals value, Liu says. A long product history is important because it is something that can’t be imitated or copied, she says. And that is why so many foreign companies in China talk about their history rather than their products. And that is why every new Lincoln dealership here will display a classic Lincoln from the automaker’s storied past, when it was the toast of presidents and movie stars.

Lincoln’s China market strategy is aimed at reaching the country’s youngest luxury buyers, who are not as notoriously status conscious as their elders. They are 30 to 45 years old, distrustful of current dealer sales and maintenance practices, less enamored with conspicuous consumption and are looking for something different from the same old strudel they grew up with.

“Years ago, the most popular (women’s) handbag was one with a lot of logos on it,” Pei-Wen Hsu, deputy general manager of Lincoln China tells WardsAuto. “But now it is different. People are looking for things that are subtle, with more substance. They want to show their taste rather than their social status. They want to be different in a very personal way. They are not looking for bling, bling in your face anymore.”

Futuristic Dealerships Reinforce Brand Message

“The Lincoln Way is rooted in Lincoln’s heritage of personal service,” says Parker. “It is based on our understanding of today’s evolving Chinese luxury customer and our recognition that every man or woman who walks through our doors is a unique individual, with his or her own deeply personal definition of luxury.”

This message likely will resonate in particular with women shopping for utility vehicles. Li Xing, Chief Editor of The Robb Report in China, says establishing a special personal image is the main reason women shop for CUVs and SUVs. Male customers care more about performance and function.

The purchase experience will start with the dealership “personalization studio” that uses a huge screen to display life-size images of vehicles. Potential buyers see all the brand’s models, colors and features and configure a vehicle inside and out.

A tea room also will be part of the specially crafted experience created for Lincoln dealerships in China, designed to create an inviting environment customers will associate with their living room or a 5-star hotel lobby.

The service experience will start with the customer being recognized the instant of their arrival by license-plate recognition technology. Then, to ease concerns about how repair and maintenance work is performed, patrons will be able to watch their vehicles being serviced in real time via cameras positioned in the service bays, all from the comfort of a special lounge. Extended service hours and loaner vehicles for repairs taking more than two hours also will be provided.

“One of the key things we find from our research in this market is everybody is talking about luxury but very few OEMs can really put the experience front and center to provide luxury to the consumer,” says Lincoln’s Hsu.

“For me, it’s about communicating that the Lincoln brand is not a classic prestige brand, it is a progressive modern brand. When we show the product and how our customer experience works, people get it,” Hsu says.

Exactly how the vehicles will be priced in China has not yet been revealed. Lincoln says products will be priced competitively with the segment leaders produced locally in China. But because all Lincoln products will be imported from North America, at least at first, tariffs will pinch profit margins compared with vehicles built in China.

Lincoln executives are reluctant to talk specifically about costs and stickers, in part because stating any price is an invitation to bargain in China.

“If you have a price, people will bargain with you,” warns The Trends Academy’s Jin. “But if you talk about history and culture, you can counter the price.”

dwinter@wardsauto.com