Lincoln Dealer Network To Be Downsized

October 6, 2010

"Cull: to reduce or control the size of (as a herd)."

So says Merriam Webster’s Collegiate Dictionary. That’s what Ford  plans to do to its 1200-unit herd of Lincoln dealers across the country. It will take two years, according to a Wall Street Journal article published in the wake of a meeting of Ford dealers held at the company’s headquarters in Dearborn, Michigan.

The plan is to strengthen the remaining franchisees by reducing their ranks by 175, and making the move by holding sit-downs with the dealers over the next 100 days. Voluntary buyouts will be a tool offered to the targeted dealerships, which may be found in the 130 major metropolitan areas the luxury brand serves. Over three-quarters of Lincoln sales are generated from that geographical market type.

The WSJ article theorizes that dealers that do not sell Ford cars would be the most at risk since this will be the last year for Mercury, which was the companion brand of the typical Lincoln dealership. Ford hopes to invigorate the Lincoln brand and sales of vehicles like the 2011 MKX by having the remaining dealers make investments in their operations, which would include the availability of loaner vehicles and car washes, which are offered during service trips.

In an effort to demonstrate the uphill battle the Lincoln dealers face, they were shown videos that featured BMW and Lexus owners gushing about their cars and the treatment they receive when they are in for service. They also shared their impressions of the Lincoln brand.

Ford embarked on a redo of its offerings about three years ago according to a NPR article. The effort met with limited success and led to the plan to upgrade the dealerships.

NPR cited an AutoPacific stat that indicated that Lincoln’s customers are the oldest in the luxury market at 66, with BMW owners being 15 years their junior. So maybe it is your father’s luxury car.

To combat this, Lincoln will feature seven new or redesigned models in the next four years. In addition, their advertising effort is using Mad Men leading actor John Slattery and focusing on technology (specifically touch screens) and they have become the first auto company to achieve price parity in its hybrid and gas models.

So with less dealers making more money and by re-investing it in their physical plants, Ford hopes more of their newly designed models will be sold to younger buyers. This will be a happy ending for all--except the 175 dealers who are going to be culled.       

[Wall Street Journal & NPR]

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