MKZ Back on Track – But Lincoln Still Has Problems

New sedan gains momentum – even as the rest of the line-up slips.

by on May.31, 2013

Jim Farley, Lincoln's brand boss and the global marketing chief for parent Ford Motor Co.

It’s the classic good news/bad news situation for Lincoln this month.

On the positive side, after a painfully slow start due to production snags, the luxury marque’s new MKZ is finally gaining momentum and should set a record for the nameplate when May’s final numbers are tallied. The bad news?  As Lincoln gains ground, the rest of the luxury brand’s line-up has been slipping.

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“We’ll have the best month ever with the MKZ,” predicted Jim Farley, head of the Lincoln brand and the global marketing chief for its parent Ford Motor Co.

While industry sales aren’t due out until next Monday, the current total suggests Lincoln should wrap up the month with sales of around 3,300 MKZ sedans, beating the previous record of 3,092 set in May 2007. A year ago, Lincoln MKZ sales totaled around 2,400.

The latest figures are a big turnaround from the first quarter when MKZ sales were barely reaching into the triple digits.  Ford officials insisted the problem was a snag in production at the Mexican plant producing the new sedan, but skeptics speculated it meant buyers had rejected the new offering.

“We’re encouraged by our MKZ sales in May but we have a long, long road to rebuild this brand,” cautioned Farley.

Indeed, the executive has suggested it could take a decade or more to make Lincoln truly competitive with key imports like BMW, Mercedes-Benz and Lexus, and he points to the slow slog by Audi and Infiniti as examples.

If anything, May’s numbers are likely to be a mixed bag for Ford’s high-line brand, acknowledged Matt VanDyke, Lincoln’s sales, service and marketing chief.

“Car shoppers are really falling in love with Z, so that’s putting pressure on S,” said VanDyke, referring to the MKZ and the bigger MKS sedans.

While the new MKZ does appear to be “conquesting” buyers from other luxury brands, it appears that it is also cannibalizing sales from other Lincoln models, the older MKS in particular. So, when asked about overall Lincoln sales for May, VanDyke warned, “We expect to be flat, if not slightly down” for the month due to a dip in demand for all models except for the new MKZ.

Lincoln executives still tried to put a positive spin on the news, noting that there are a lot of positive signs. For one thing, they are seeing more new buyers checking out Lincoln online or rolling into showrooms, potential customers driving brands like BMW and Lexus.

One of the more significant developments with the MKZ is the strong demand for the hybrid version of the sedan, especially in traditionally import-oriented markets like Los Angeles, as well as in Texas.

Lincoln took the unusual step of offering either a conventional V-6 powertrain or the hybrid alternative at the same price with the new MKZ.  Normally, hybrids carry a premium that can run into the thousands of dollars.

“That has really resonated with customers,” said Farley, during a Friday conference call with reporters, hinting that strategy is something that will be considered with future models.

Lincoln has so far committed to launching four new models in 2013 and 2014, starting with the MKZ. Next up is the compact MKC crossover, a concept version debuting at the Detroit Auto Show last January. A next-gen version of the MKS will follow, as will the complete remake of the aging Navigator full-size SUV.

Beyond that, Ford CEO Alan Mulally has confirmed to that other products are set to follow.  That includes a sporty Lincoln that will share the new platform set to debut with the launch of the 50th anniversary Ford Mustang next year.

Lincoln does have more to come, Farley hinted.  And though he declined to discuss specific plans, he hinted that the maker will actively be looking for “new segments” that might just be starting to gain traction in the market.

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