Ford Offers Lincoln Dealers Choice to Close Shop or Invest
Many dealers have relied on the soon-to-be defunct Mercury brand for the bulk of their sales, the auto maker says.
Ford Motor Co. says there is no set number for the Lincoln dealers it wants to exit the market and those it wants to invest in their franchises, as some media reports suggest.
Rather, the auto maker is leaving it up to dealers to decide which direction they want to go, spokesman Christian Bokich says, noting the long-term objective is to ensure the dealer body is successful.
However, “it’s fair to say many Lincoln dealers are more competitive with one another than other luxury brands,” he says. “We don’t have a list of dealers we’re specifically targeting.”
Lincoln dealers on Monday were called to Dearborn for a confab on the future of the brand. The auto maker has said it wishes to take the marque more upscale and has promised to launch seven new or refreshed models over the next four years.
Bokich says about 1,000 dealers and associates representing 700 franchises were in attendance at the meeting, where they were given three options.
With Mercury set to be discontinued by year’s end, Lincoln-Mercury dealers either can close shop or invest in their stores to create a true “luxury experience.” For those who sell Ford, Lincoln and Mercury and don’t want to invest in Lincoln, they can concentrate strictly on Ford.
There currently are 1,187 dealers who sell Lincoln and Mercury products. Of those, 264 are stand-alone Lincoln-Mercury stores, while 923 sell all three brands. Dealers are expected to make their decisions by early next year, Bokich says.
Several more meetings will take place before the Christmas holidays and in early 2011. “The goal is for dealers to take the information and make their own business decision,” he says.
Those deciding to shutter their showrooms will receive financial compensation from Ford, says Bokich, noting payouts could vary depending on location and volume.
Ford also will provide financial support for those wishing to invest in their Lincoln stores, although the amount cannot be determined until there is a concrete plan for the upgrades.
“Everybody agrees, both dealers and Ford, that once the Mercury announcement happened in June, and the decision was made to enhance Lincoln, the current setup needed an upgrade,” Bokich says. “Mercury volume, itself, (in many cases) is two-thirds of the volume (at Lincoln-Mercury) franchises.”
The Lincoln brand delivered 63,286 vehicles through September, compared with 71,179 for Mercury, according to Ward’s data.
Ultimately, Ford wants to better-position Lincoln to compete with Lexus, BMW and Cadillac, but there still is work to do before that happens.
“To become a world-class luxury brand, we have to move in a specific direction,” Bokich says, noting new products indicate Lincoln is on the right track. He points to the success of the new ’11 MKX cross/utility vehicle, as one example. Sales of the CUV jumped 76.0% in September to 2,658.