DEARBORN, MI –is pouring considerable time, money and resources into reviving its ailing Lincoln luxury brand, says a top executive who insists the marque will not meet the same fate as the mid-market Mercury division that was phased out in 2011.
“There is a stark difference between business conditions and situations of where we are now vs. where we were (when Mercury was killed),” Matt VanDyke, director-global Lincoln, tells WardsAuto in an interview here.
“The reality is, the company recognizes that the biggest and best leaders in our industry have a global luxury brand for a reason.”
Lincoln, once considered a pacesetter in the luxury segment, has fallen on hard times. U.S. sales in 2012 reached just 82,150 units, and through March stood at 15,899, according to WardsAuto data. The luxury division sold 231,660 cars at its peak in 1990.
But while deliveries have been on the decline for several years, the drop in 2013 largely has been due to a delay in the launch of the all-new ’13 MKZ sedan, the volume leader of the Lincoln lineup.
Expected to launch in fourth-quarter 2012, MKZ units just now are trickling into dealerships, hampered by parts shortages and quality issues. Built at’s Hermosillo, Mexico, plant, thousands of MKZ units then were shipped to Ford’s Flat Rock, MI, facility to undergo post-production quality inspections and repairs.
VanDyke says shipments from Hermosillo now are going directly to dealers, but the delay caused by the inspections ultimately lost some customers who tired of the wait.
“No question we have gotten customers interested in the product, and they haven’t stayed with us,” he says. “We’ve sent appreciation gifts to customers that have retail orders booked, and despite that there are people who are now out of the market.”
VanDyke does not disclose how many MKZ buyers have been lost due to the delay but says without the inspections the fallout from delivering faulty units would have been an even larger blow.
Ensuring top-notch quality is essential to the re-launch of Lincoln, he says. “Our commitment to dealers was we had to have a higher level of quality than we have delivered in recent history, and our commitment has been firm.”
Another part of Lincoln’s new promise was to coddle customers with a uniquely high level of service. The brand has launched a training program for dealership personnel and a new concierge service in efforts to ratchet up the showroom experience.
However, the lengthy launch delay has run counter to those plans to enhance customer service, and VanDyke says Lincoln has taken drastic steps to please those buyers still waiting for their MKZ to arrive, including extending existing leases.
Dealers also have been reimbursed for financial losses incurred by the delays, he says, receiving direct payments to compensate salespeople who have missed quotas due to the lack of product.
Despite such efforts, frustration is on the rise among some dealers who believe Lincoln leadership has failed to effectively communicate the MKZ delay.
VanDyke admits communication has been lacking.
“We talk to the dealers every day and week, but we tell can’t tell (them) exactly where (the ordered vehicle) is,” he says, noting the arrival of parts is the primary reason accurate delivery estimates cannot be made.
While steps are being taken to diffuse the problems, Lincoln is working to ensure future vehicle launches will go more smoothly, without the need for disruptive quality inspections. VanDyke admits quality “can’t be inspected into a vehicle” and that it must be built into the manufacturing process.
Ford is taking a long-term approach with reinvigorating Lincoln, and not putting a timetable on when it expects the brand to regain its place in the luxury market.
“It took Audi three product lifecycles to get to the point where they are right now,” VanDyke says of the German luxury brand that has rebounded from near extinction in the U.S. in the late 1980s.
Ford also is not skimping on cost, VanDyke claims. He declines to reveal the exact dollar amount, but says investment is in the billions. Some of the investment is focused on building a new Lincoln-exclusive design center and hiring nearly 150 product-development personnel who will be devoted to reviving the brand.
Plans call for the launch of four new Lincolns within the next four years, starting with the MKZ. Next up likely will be a production version of the MKC midsize cross/utility vehicle concept shown at the North American International Auto Show in Detroit in January.
Despite the investment, Lincoln faces a monumental task of regaining its footing in today’s ultracompetitive luxury segment.
When Ford brass discussed the best strategy to re-launch Lincoln, VanDyke says they faced two choices – embrace the marque’s rich but tarnished heritage or discount the past and begin anew.
It was decided to build on the brand’s heritage, even though many new luxury customers aren’t old enough to remember Lincoln’s heyday and middle-age consumers are familiar with the more recent line of lackluster models.
“When we talk to people, there are a lot that say ‘Wow, Lincoln hasn’t made something for me recently, but it used to be the product my parents drove, and I admire the brand,’” VanDyke says. “We think that’s a real foundation to build on, not just here but globally as well.”
Ford recently announced plans to start selling Lincolns late next year in China’s fast-growing luxury market, where many consumers are unfamiliar with the brand. The auto maker currently is determining dealer candidates.
Marketing initiatives for Lincoln in the U.S. already have begun, including an ad launched during the recent Super Bowl showing a Town Car morphing into the new MKZ sedan.
Unfortunately, the Super Bowl spot was ill-timed, as most U.S. dealers didn’t have any MKZ sedans to sell. VanDyke admits the timing could have been better, but notes the Super Bowl ad buy was placed long before the quality issues emerged.
“The marketing launch hasn’t lined up with the expected inventory ramp-up, and that is not an ideal situation, far from it,” he says. “Would we have done things differently? Absolutely.”
The auto maker has taken steps to differentiate the new Lincolns from the Ford vehicles on which they are based on. Lincoln has been criticized in the past as being nothing more than gussied-up Fords, a viewpoint of which VanDyke is well aware.
The MKZ is first of the new Lincolns with sheetmetal that does not resemble its Ford Fusion stablemate, he says, hinting Lincoln-exclusive engines also are in the works.
Purists argue Lincoln needs a rear-wheel-drive vehicle to go head-to-head with the German makes that dominate the luxury market. But VanDyke says all-wheel-drive models are well-accepted in the segment, pointing to Audi’s success with that configuration.
“I’m not convinced that old (RWD) paradigm will still hold true, given the things that can be done with the technology of current platforms,” he says. “I think every product has to be a significant step forward.”
VanDyke says Ford’s top brass is committed to Lincoln in a way he has not seen before, and he dismisses critics who contend the revival plan won’t work. That includesChairman Dan Akerson, who in 2011 said, “They are trying like hell to resurrectLincoln. Well…you might as well sprinkle holy water. It's over.”
Asked about Akerson’s remark, VanDyke smiles. “That quote may be posted in a few rooms around this building,” he says. “But we don’t need much extra motivation to be successful.”