Ford Talks Lincoln, Slows Product Releases

Blue Oval continues to refine its business model.

Of the three Detroit automakers, the Ford Motor Company is the healthiest, has the newest products, is showing the biggest increase in market share and is enjoying the largest profits. They’re also deeply in debt, having not received the benefit of a bankruptcy reorganization enjoyed by General Motors and Chrysler.

Looking Ahead

Ford may not be at a crossroads as far as it long term viability goes, but they are taking stock in two important areas right now:

Rejuvenating Lincoln — With Mercury’s fate sealed, the Blue Oval will be left with just two brands: Ford and Lincoln. Ford is in excellent health while Lincoln could use a fresh injection of new products and a clear picture as to its position in the market. There is no stand out Lincoln model available while competing Cadillac has two healthy lines: its CTS portfolio and SRX crossover.

Ford management will be meeting with Lincoln dealers on October 4 to outline strategy for the brand. Reporting for the September 9, 2010 issue of “Bloomberg Businessweek,” Keith Naughton says that Ford is asking its 1,187 Lincoln dealers to upgrade their showrooms and to improve customer treatment.  That’s part of Ford’s strategy to introduce seven all-new or substantially updated Lincoln models over the next four years.

Product Cycling — Ford has been moving through the product cycle mix at a rapid clip. Models are being refreshed or completely overhauled and new products including the electric Transit Connect, subcompact Fiesta, compact Focus and Explorer crossover are being introduced within a six month span.

Writing for the September 10, 2010 issue of “The Detroit News,” Alisa Priddle reports that Ford is slowing down its product introduction pace in a bid to cut costs and reduce its debt load. Through the end of 2010, Ford’s annual replacement rate has been at 33 percent, well ahead of the industry average of 27 percent.  Ford will slow things down, but not by much, according to Mark Fields, who is Ford Americas President.

Sales Pace

Ford brand passenger vehicles — cars and trucks — are selling at a 20 percent faster rate than they did in 2009 while Lincoln sales are up by 4.7 percent for the year. Lexus is the luxury segment leader, selling approximately 2.5 times the number of vehicles as Lincoln.

One thing Ford isn’t planning to do is to make Lincoln a worldwide brand. The automaker seems content with selling it luxury brand in two markets chiefly, the United States and Canada.

Photo Credit: Ford Motor Company