Ford (NYSE:F) has not had an easy time reviving its luxury brand, but the automaker’s efforts to breathe new life into the Lincoln have begun to produce strong sales, at least in April.
Since reaching a peak of popularity in 1990, the 90-year-old brand has lost significant market share to Bayerische Motoren Werke’s BMW, Daimler’s Mercedes-Benz, Toyota’s (NYSE:TM) Lexus, and Volkswagen’s Audi. Now, the brand’s iconic black Town Car is more commonly thought of as airport transportation for executives than as a luxury vehicle, and 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, according to a press release issued Wednesday. This growth contributed to a substantial increase in new vehicle sales as well. Overall, Lincoln sales rose 21 percent from the previous month.
To jumpstart sales this year, Ford bought a 60-second Super Bowl commercial slot and launched a $1 billion marketing campaign. The goal was to make the brand appeal younger, wealthier buyers instead of the Lincoln’s traditional customer, who is, on average, 65 years-old. However, not all analysts believed that Ford could transform the Lincoln. “Ford has got to have reasonable expectations with Lincoln,” Edmunds.com analyst Michelle Krebs told Bloomberg at the beginning of the year. “The MKZ is a very fine car, but does it really compete with a BMW 3 Series? It’s not even on the same shopping list.”
But the real problem that kept sales faltering in the first few months of the year were glitches in production, holdups that coincided with the launch of the company’s media campaign. The 2013 MKZ was fully redesigned for this year, but issues forced Ford to ship the sedans from Mexico, where they were built, to a plant in the U.S. for further quality inspections, which had to take place before the vehicles could be delivered to dealerships. This process left dealers with few MKZs to sell at the beginning of 2013. But, as Jim Farley, the global chief of Lincoln and Ford’s marketing and sales chief, told The Wall Street Journal Tuesday, from his two-decade long experience in the luxury business, it was “just the right decision.”
During the first three months of 2013, sales of Ford’s Lincoln declined 24 percent to 15,899 cars and sport-utility vehicles. The MKZ’s production troubles especially hurt results as it was the best-selling model last year. But Farley said that four new Lincoln vehicles will be launched this year — in hopes of energizing sales; the MKZ, which went into production late last year, will be first.
Despite the Lincoln’s disappointing sales Ford Chief Financial Officer Bob Shanks has said the brand is profitable, and Farley has denied rumors that the company will discontinue the brand in the next few years.
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