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Can Ford's Momentum Boost Lincoln?

Surging Ford will close its Mercury brand, freeing resources to battle with Cadillac and Lexus in the luxury car segment.
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DETROIT (TheStreet) -- Ford says Lincoln is ready for prime time.

With 82,000 sales in 2009, Ford's Lincoln brand ranked third among the luxury cars produced by the top three U.S. automakers, as

Toyota's

(TM) - Get Report

Lexus sold 113,000 vehicles while

General Motor's

Cadillac sold 109,000.

Now, resurgent Ford is ready to bring more resources to the competition. "Our Ford brand is gaining momentum and winning customers around the world," said CEO Alan Mulally, in a prepared statement. "Now, we are going to use the same laser focus to further strengthen Lincoln."

Read on for more about Ford's Lincoln strategy.

>>Slideshow: Ford's Mercury to Follow Olds, Pontiac

>>Ford to Shutter Mercury Production

1947 Lincoln Continental

The competition is not new. Lincoln has been a competitor to Cadillac since it was founded in 1917 by Henry Leland, a Cadillac founder. The bankrupt brand was sold to Ford in 1922. Among the biggest changes in this space during the past eight decades is that Lexus replaced

Packard

as one of the big three players.

Mulally's bet is that

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Ford closing Mercury will free up resources that can be used for Lincoln, enabling it to continue the market share gains it has been making along with Ford.

Lincoln Town Car

While Lincoln's share of the U.S. luxury vehicle market has grown from 4.5% in 2005 to 6.3% in the first quarter of 2010, analysts say that Ford still has a way to go before getting to where it wants to with Lincoln.

"It's an uphill battle," said TrueCar.com analyst Jesse Toprak. "If you go way back in history, Lincoln had its moments, but in the last couple of decades, Lincoln has never been a volume brand or a brand with tons of credibility."

Lincoln Navigator

The possibilities are inviting, however. The first challenge is to find some younger buyers. Last month, Lincoln buyers averaged about 58.7 years old, the second oldest age group after Buick buyers, who averaged 61 years old, according to Toprak. Mercedes buyers came in third at an average of 57.3 years old, followed by Cadillac's at 57.1, Chrysler's at 54.6 and Lexus' at 53.6.

"

Ford will introduce different levels of luxury vehicles that will be able to grab the younger demographics that will not normally consider a Lincoln," Toprak said. The planned introduction of a smaller, C-Class vehicle will help Lincoln become "a more hip brand, he said. "But that will take time -- it isn't going to happen in the next year. Re-inventing a brand image takes a decade."

2010 Lincoln MKZ

Of course, Lincoln can look to global markets, especially given that 80% of automotive sales growth (industry-wide) will be outside the U.S. Asked about global distribution for Lincoln at a press conference on Wednesday, Mark Fields, Ford president for the Americas, responded, "Our first priority is 'let's build on the foundation we have set for Lincoln' -- our focus in this plan is North America, and then we'll see what happens."

"If they really work on making this brand global," said Toprak, "that will be the key."

A third favorable possibility is that as the economy recovers, Toprak expects the luxury segment to recover more rapidly. "We have had a lot of postponed decisions, not because people couldn't buy a car, but because it didn't seem right to buy a luxury car in a recession," he said.

Leasing is particularly important in the luxury market. "Lincoln's potential is partially based on Ford's ability to create attractive lease programs," said Toprak, noting that Toyota lease spending has stimulated Lexus sales, which remained high in May despite an overall slump by the Toyota brand.

2011 Lincoln MKX

Ford has "a very clear vision for Lincoln," said Fields. That vision includes "a very engaging driving experience and ride and handling, combined with a really warm and inviting level of comfort on the interior of the car."

During the next four years, Lincoln will get seven new or significantly refreshed vehicles. Currently, the flagship MKS large sedan, the MKT seven-passenger crossover and the MKZ mid-size sedan are in showrooms. Later this year, the hybrid version of the MKZ will arrive in showrooms and Lincoln will debut the refreshed 2011 MKX crossover. Six more new or significantly refreshed vehicles are in the pipeline, including the first C Class Lincoln.

-- Written by Ted Reed in Charlotte, N.C.