Ford’s leaders are doubling down on their investment in the Lincoln brand in hopes of coming up with a winning hand as other luxury brands, such as Mercedes-Benz, BMW and even Cadillac, have stronger followings than long-suffering Lincoln.
However, it has been difficult to know what that meant, in terms of dollars, until now. In September, Ford executives suggested the plan called for a $2.5 billion cash infusion into the brand; however, Ford CFO Bob Shanks said last week that the figure was low because it excludes engineering and some sales-related expenses.
Some experts put the number closer to $5 billion.
The move isn’t entirely surprising given the fact that Ford CEO Mark Fields has repeatedly expressed a desire to bring the luxury brand back from death’s door. Fields’ predecessor, Alan Mulally, wanted to get rid of the brand during the company’s restructuring, but Fields and others convinced him to spare it.
One of his first moves upon moving up to the top spot at the Glass House was replacing Jim Farley as the head of Lincoln with Kumar Galhotra, who had been vice president of engineering. As Lincoln rebuilds and expands it’s only natural that the brand has a dedicated leader, Ford officials said at the time of the appointment.
Ford executives said last month that the immediate goal of the latest Lincoln turnaround effort is to triple the brand’s global sales to 300,000 vehicles by 2020.
Part of that growth involves a foothold in China. Lincoln opened for business there for the first time last spring and has launched a promising new product, the Lincoln MKC crossover, in the United States.
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Much of the anticipated renaissance of the Lincoln brand – which comes with the blessing of Ford Chairman Bill Ford, Jr. – focuses on the introduction of new products. The MKZ generated a lot of buzz when it first came out, but faltered when quality and production issue cropped up. The company’s next model to debut is the new MKC: a compact luxury crossover.
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The company also tried to give the brand a new feel by signing actor Matthew McConaughey to a multi-year deal to be its spokesman. The first set of ads feature McConaughey and his well-known Texas twang driving around in the MKC talking about his experiences with Lincoln in the past and in the present.
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While it’s tough to determine the impact the most recent moves have had on the brand, its sales in September were up 12.5% led by the new MKC as well as increases by MKX and the Navigator. For the year, the results are even better as the brand is up 13.3% and the MKZ and MKC are playing a significant role in the growth.
The increases are good news for a brand that was once the best-selling luxury maker in the U.S. Lincoln held the No. 1 spot in 1998 and has since fallen to eighth place among luxury brands. It’s sales last year were about half the sales of Cadillac and a quarter of Mercedes, the segment leader. Last year, Lincoln sales were 81,694, less than half of the 187,121 cars it sold in 1998.