Ford’s new chief executive, Mark Fields, reportedly is giving the Lincoln brand a little love and a lot of cash.
According to Reuters, Lincoln, a famous Detroit brand which Ford has owned since 1922, has been in a swoon for the past two decades, leaving dealers and customers wondering if Ford management had left the brand for dead.
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Now, with the renewed backing of executive chairman Bill Ford and the company’s board, Fields has committed the automaker to a multiyear, multibillion-dollar overhaul of Lincoln that includes a significant investment in a new premium vehicle platform that will underpin several future Lincoln vehicles, four sources told Reuters.
Ford could spend at least US$5bn over the next five years to revive Lincoln, revamp its product portfolio and reposition it as a true competitor to such global luxury leaders as Mercedes-Benz and BMW, the sources told the news agency. Details of the new platform and the size and scope of the investment have not previously been reported.
“It’s really important for us to have a relevant and vibrant luxury brand,” Fields told Reuters recently.”You need to make the investment and build this brand over time.”
He declined to discuss details about Ford’s spending and product plans.
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By GlobalDataFields said Ford was looking at the Lincoln rebuilding effort “in terms of generations of products”, an effort that would stretch well into the next decade.
Ford executives said last month that the immediate goal of the latest Lincoln turnaround effort is to triple the brand’s global sales to 300,000 vehicles by 2020.
Several industry analysts have challenged that mark as overly optimistic, as have some former Ford executives who spoke anonymously to the news agency.
A longer-range target was to restore Lincoln as a premium automotive brand in the United States and build it into a formidable competitor in China where Ford is just now launching the brand years after most of its global luxury rivals entered that market. Last Friday, Ford delivered its first Lincoln in China, an MKZ sedan.
Current Lincolns are largely ritzier versions of Ford models.
According to Reuters, citing industry sources familiar with Ford’s plans, the basis of the Lincoln revival plan is a new family of vehicles that will be built on a highly flexible premium platform that can be configured for front-, rear- and all-wheel-drive vehicles.
That is a critical element that has been lacking in several previous, under-financed attempts to resuscitate the brand. Versions of the platform will be used by both the Lincoln and Ford brands, the sources added.
Citing two sources, Reuters said former Ford CEO Alan Mulally, who stepped down in July, declined to make more than a nominal investment in Lincoln – and even considered selling or closing the brand.
But successor Fields has directed his management team to try to reverse a long-term US sales skid that has seen Lincoln sink from the top spot in 1998 to eighth place among luxury brands, with about half the sales of General Motors’ Cadillac and a quarter the sales of segment leader Mercedes. Last year, Lincoln sales were 81,694, less than half of the 187,121 cars it sold in 1998.
The revival effort is backed by the first significant investment in Lincoln in years one that will see every product redesigned or replaced over the next five years, the news agency said.
A Reuters source said Ford had already spent about $2bn on Lincoln in the past two years with about half of that to prepare for the brand’s introduction this week in China and half to update and expand its product line to tide the marque over until the new family of vehicles is ready toward the end of the decade.
Ford has said in some years it spent only $500m or less on Lincoln. In September, the automaker told investors it planned to spend over $2.5bn to the end of 2019 on Lincoln product development, facilities and tooling.
That does not include spending on engineering, advertising and other sales-related expenses for Lincoln, Ford CFO Bob Shanks told Reuters recently.
Much of the new investment is earmarked for development and tooling of the new premium platform, known internally as D6, Reuters’ sources said. The development is being overseen by new Lincoln president Kumar Galhotra, an engineer.
