Ford's Lincoln Trails in U.S. Luxury Car Market

Lexus, Mercedes-Benz and BMW lead the U.S. luxury car market in sales at midyear
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We expect U.S. luxury automotive sales to rebound this year and going forward as the economy recovers.

In the short term, we expect the luxury vehicle market to be led by

Toyota

's

(TM) - Get Report

Lexus,

Daimler

's

(DAI)

Mercedes-Benz and

BMW

(BMW)

in that order.

Ford

's

(F) - Get Report

Lincoln brand is currently in turnaround mode, as reflected in its lackluster midyear results. Ford CEO Alan Mulally has launched an ambitious plan to revive the venerable brand by launching seven new or partly new Lincoln models over the next four year. Our analysis follows below.

Midyear Results

U.S. automotive sales are expected to total 11.5 million this year, up from 10.5 million in 2009. In the U.S. luxury vehicle segment, Lexus lead 2010 mid-year sales with 107,430 units, followed by Mercedes-Benz, 103,674; BMW, 100,632; Cadillac, 64,785; Acura, 61,117; and Lincoln, 43,762.

We expect Mercedes-Benz to sell 200,000 vehicles in the U.S. this year and 1.38 million worldwide. As we explained in an earlier article, Mercedes-Benz posted very strong results in the first half of the year, driven by euro depreciation, rising luxury car demand, quality improvements and a successful model mix.

Going forward, we expect global Mercedes-Benz sales to exceed 2.1 million by the end of the Trefis forecast period. You can drag the trend-line in the chart below to create your own Mercedes-Benz forecast and see how it impacts Daimler's stock price.

Ford's Lincoln brand should either maintain or slightly reduce its market share in 2010. Lincoln has fallen dramatically in consumer favor since its heyday in the late1990s, when the Lincoln Town Car and the Lincoln Navigator made it one of the hottest luxury auto brands in the country.

Going forward, Ford plans to launch seven new or refreshed Lincoln models, including a hybrid version. As a result, we expect Lincoln's share of the North American luxury vehicle market to rise during the Trefis forecast period, from 0.8% today to 1.1% by 2016.

You can drag the trend-line in the chart below to create your own Lincoln sales forecast for North America and see how it impacts Ford's stock price.

Although Lexus has suffered a slew of recalls recently, we expect it to maintain its leading U.S. market share going forward, driven by fuel efficiency, attractive financial incentives and pricing, and a very strong brand associated with both luxury and value.

You can see our complete $63.50 stock price estimate for Daimler

here

.

You can see our complete $14.20 stock price estimate for Ford

here

.

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