Ford Lincoln: Experiment in China, Win At Home

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Ford’s (NYSE:F) Lincoln-branded vehicles have been rolling off assembly lines since 1922. Even though the luxury brand has lost some of its prestige in the past two decades, Ford has set the cars off on a revolutionary new course. The Lincoln has been redesigned, which helped U.S. sales soar 21 percent in April, and the Dearborn-Michigan based automaker is now using China as a laboratory to study the shopping habits of consumers in one of the world’s largest economies.

The company is examining the habits of luxury shoppers in Shanghai for new methods of customer service that could eventually be employed at Lincoln dealerships in the United States.

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“In many ways, China will be a listening post for Lincoln in the United States,” Jim Farley, global head of Lincoln and the automaker’s top marketing executive, said in an interview with Automotive News at the Shanghai auto show. “Soon China will be the largest luxury market in the world.”

Since reaching a peak of popularity in 1990, the Lincoln has fallen through the ranks to be the eighth top-selling luxury brand in the United States. While the brand once outsold its rivals, during the past decade, as Ford spread its investments for premium vehicles over Volvo, Land Rover, and Jaguar — all brands it has since discarded — the Lincoln languished. But with the MKZ, a new midsize sedan, Ford is slowly becoming more competitive. Last month, Ford sold approximately 4,000 of the vehicles, more than in the last three months combined.

At a meeting with several Chinese Lincoln dealership operators before the auto show, Farley compared the Lincoln’s expansion into China with what he experienced assisting Toyota (NYSE:TM) build the Lexus and Scion brands from scratch. “It felt like 1988 to me with Lexus,” said Farley, who was a product planner for Toyota when the automaker launched its luxury brand.

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Lincoln’s first dealerships in China will open their doors in 2014, and because the brand has never been sold there before, Ford will have a unique opportunity. “Because we’re building the Chinese Lincoln business from the ground up, we can take more chances here. The dealer network is brand new,” Farley said. “We can give them large trading areas. They will have large throughputs and they can make upfront investments and differentiate the service.”

Where the Lincoln has a storied history in the United States, one that covers both high points and low points, the brand has an empty slate in China onto which it can project its redesigned  image.

According to Brett Wheatley, Ford’s vice president of marketing for Asia-Pacific, the company’s Lincoln representatives have visited luxury auto dealerships of other brands and are even studying shopping patterns at retail outlets of non-automotive luxury brands like Salvatore Ferragamo, Prada, and Hermes. The representatives accompanied a pair of shoppers as they browsed Shanghai’s swanky IFC Mall, where they purchase a $1,900 handbag and several pieces of jewelry.

“It was fascinating to watch the luxury shopping experiences firsthand,” Wheatley said of the experience in an e-mail to Automotive News. “Some of the retailers did an excellent job with attention to detail on branding from the moment you approach the entrance to the store, to the attire of the staff, and the way the product is displayed.”

From this discovery, he found that shoppers preferred a different type of sales experience than is commonly executed in the United States; the pace was slower and many customers enjoyed the both the experience of shopping for luxury items and interaction with the sales professionals. Lincoln hopes to cultivate similar one-on-one relationships with customers in the United States, although Ford has not specified which strategies it learned in China will migrate to the united States.

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China will be an opportunity for Ford’s Lincoln, but it will be difficult to establish the brand because many luxury brands compete for the attention of China’s shoppers. Still, “Ford has a great opportunity to grab and hold investors’ attention by bringing to the table global tools and experience that help Lincoln dealers find profit opportunities,” Hamilton Gayden of the automotive retailing consulting firm Urban Science Applications told the publication.

Follow Meghan on Twitter @MFoley_WSCS

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