Ford's Choice of Lincoln Over JLR Good a Bet as Any

Ford in 2008 sold its Jaguar Land Rover division at the behest of then-CEO Alan Mulally, who wanted to concentrate on the core Blue Oval brand and raise money in the midst of the global recession.

There were rumors then Mulally also wanted to shutter Lincoln, but was eventually convinced by Chairman Bill Ford to keep the luxury division.

Today, some say Ford made a poor decision by selling JLR and retaining Lincoln.

But it’s really not that simple, as both Lincoln and JLR have a lot of work to do to catch up with global luxury leaders.

In 2014, Lincoln’s U.S. sales jumped 15.6% to 94,474 units, while JLR’s deliveries rose 0.4% to 67,238, according to WardsAuto data.

Lincoln may have won the U.S. sales battle, but globally JLR’s sales gained 9% to 462,678 vehicles in 2014. Lincoln didn’t report any sales outside of the U.S., other than a handful of units delivered in China toward year’s end.

JLR’s global presence is something Lincoln is desperately trying to duplicate by setting up shop in China.

But the British brands remain woefully short of segment leader BMW, which delivered 2.1 million vehicles in 2014.

There were reasons besides the global recession that drove Mulally to jettison JLR.

For years prior to the sale, JLR was struggling, and Ford lacked sufficient resources to fund the development of new models. Instead, Ford turned to badge engineering, creating the ill-fated X-Type that rode on a Mondeo platform.

Traditional luxury customers were not buying what Ford was selling, which caused JLR to cede ground to other marques, particularly BMW and Audi.

JLR vehicles also suffered from a reputation for poor quality, something Ford was unable to remedy completely.

Ford was not the only owner that failed to rejuvenate the storied brand. BMW paid $1.3 billion for Rover in 1994 in an attempt to expand beyond its luxury-car roots and add SUVs to its lineup. Instead the purchase turned into a money pit that dragged down profits and cost Chairman Bernd Pischetsrieder his job.

BMW ultimately decided it was more cost effective to develop its own lineup of luxury SUVs.

It took billions of dollars invested by current owner Tata to reverse JLR’s flagging fortunes, and the transformation is still not complete. Land Rover is carrying much of the weight as Jaguar works to catch up with new products, including the new X-Pace CUV.

Although global deliveries rose 6% to 81,570, Jaguar struggled in the U.S. last year as sales fell 6.9% to 15,773.

Meantime, Lincoln continues on its own journey with the introduction of new models such as the MKC and MKX CUVs. But with competition so fierce in the brand’s home North American market, it may be years, if ever, before it can challenge the top luxury marques. However, the same could be said of JLR.

Given the investments needed at Lincoln and Jaguar, it’s hard to say Ford chose poorly seven years ago.

Still, JLR tends to get lauded for its successes, while the cost required to make that happen largely is ignored. Lincoln, on the other hand, mostly just gets criticized for its shortcomings.

The reality is neither brand was then – or is now – a clear-cut golden opportunity.

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