"New" GM sales up 20%

[RichardJensen]

Eventually Ford is going to have to make a Cadillac-like investment in Lincoln to get it up to speed.

I don't think so, and here's why:

 

I think you're looking at this from an image standpoint, not an ROI standpoint.

 

Ford's mantra (and what doomed JLR), is that every platform and product has to pay its own way.

 

Ford will not be making Cadillac sized investments in Lincoln because Lincoln won't pay off those investments.

 

Instead, you can expect Ford to ratchet Lincoln upwards gradually, until they clearly meet their defined target--which is -luxury-, not -sport-.

 

Lincoln's line is profitable now, and pays for ongoing development. Ford is unlikely to trade that in for a pie-in-the-sky hope of luring away BMW buyers.

[Deanh]

I'm not saying Cadillac's investment was worth it or not. What I was getting at is that no one respects Lincoln as a luxury brand and their sales will continue to be somewhat disappointing until that changes. I'm certainly not putting any Lincoln on my shopping list until that image changes. Call me shallow, but frankly, if I'm spending $35-40K+ on a car, image matters.

so, when WILL we see you in a Volt .....

[NickF1011]

I don't think so, and here's why:

 

I think you're looking at this from an image standpoint, not an ROI standpoint.

 

Ford's mantra (and what doomed JLR), is that every platform and product has to pay its own way.

 

Ford will not be making Cadillac sized investments in Lincoln because Lincoln won't pay off those investments.

 

Instead, you can expect Ford to ratchet Lincoln upwards gradually, until they clearly meet their defined target--which is -luxury-, not -sport-.

 

Lincoln's line is profitable now, and pays for ongoing development. Ford is unlikely to trade that in for a pie-in-the-sky hope of luring away BMW buyers.

 

Luxury and sport are often synonymous. What luxury brand now doesn't offer at least a couple of models with definite sporting intentions?

 

And with more and more content finding its way into Ford-branded vehicles, there is less and less reason to consider a Lincoln. In the long run, without significantly upgrading Lincoln's status, it will become another Mercury with most people wondering why it even exists.

 

I'm not saying they need to go in and start the brand over from scratch overnight, but the gradual upwards trend needs to accelerate to keep Lincoln's image justifiably more prestigious than Ford's or Mercury's -- and that's probably going to take quite a bit more investment than Lincoln is currently receiving.

 

You also reach a point where just "being profitable" isn't all you should be striving for. It eventually becomes a question of how profitable can it become vs just making money at all. With Lincoln's current lineup, there is definitely a ceiling there.

Edited May 4, 2010 by NickF1011

[Deanh]

Luxury and sport are often synonymous. What luxury brand now doesn't offer at least a couple of models with definite sporting intentions?

 

And with more and more content finding its way into Ford-branded vehicles, there is less and less reason to consider a Lincoln. In the long run, without significantly upgrading Lincoln's status, it will become another Mercury with most people wondering why it even exists.

 

I'm not saying they need to go in and start the brand over from scratch overnight, but the gradual upwards trend needs to accelerate to keep Lincoln's image justifiably more prestigious than Ford's or Mercury's -- and that's probably going to take quite a bit more investment than Lincoln is currently receiving.

 

You also reach a point where just "being profitable" isn't all you should be striving for. It eventually becomes a question of how profitable can it become vs just making money at all. With Lincoln's current lineup, there is definitely a ceiling there.

disagree with the Mercury comparison....the body styles differ completely, Mercurys were basically Fords with waterfall grills tacked on....but di agree with the synopsis, Lincoln HAS to move upscale more to draw a distinct seoeration...sad, but where does that leave Mercury...the red-headed stepchild?

[NickF1011]

disagree with the Mercury comparison....the body styles differ completely, Mercurys were basically Fords with waterfall grills tacked on....but di agree with the synopsis, Lincoln HAS to move upscale more to draw a distinct seoeration...sad, but where does that leave Mercury...the red-headed stepchild?

 

The body style really doesn't matter. Even if the Lincoln looks completely different from its Ford counterpart, if it is offering all of the same equipment and performance, then what makes it worth any more to the consumer?

[RichardJensen]

Luxury and sport are often synonymous. What luxury brand now doesn't offer at least a couple of models with definite sporting intentions?

Mercedes' AMG products, I am sure, contribute very little to the brand image that the typical Mercedes buyer carries in his head.

 

He's buying a Mercedes because it's a Mercedes; because over the past 80 years Mercedes has done comparatively little to tarnish its brand in the US.

 

Therefore, the question isn't so much what other companies are doing, as it is what the 'brand image' is for your current customers.

 

IMO, Lincoln customers now and future, are little impressed by sporty products. If they were, they'd be shopping elsewhere.

 

Should Lincoln have sporting products? Why not.

 

Are they the key to Lincoln's growth as a brand? I am certain they are not.

And with more and more content finding its way into Ford-branded vehicles, there is less and less reason to consider a Lincoln.

As little as I respect VW, the model here is definitely VW/Audi. VWs are well equipped, as are Audis, yet VW has managed to differentiate the brands enough to sell the A8 in a price sector where the Phaeton failed miserably.

 

Further, a 'sporting Lincoln' would undoubtedly share a powertrain with a Ford product, thus raising your issue in a different form: Why buy some putative Lincoln V8 coupe when one could buy a similarly powered Mustang for less?

It eventually becomes a question of how profitable can it become vs just making money at all.

Optional equipment packages are generally the most profitable components in the purchase price of a vehicle.

 

By cultivating a clientele that wants 'all the bells and whistles', Ford is cultivating a very profitable market segment.

 

By building their products on shared platforms, Ford is lowering unit costs significantly.

 

I would say that Lincoln's products now are among the most profitable vehicles in their segments.

 

I would venture to guess that the typical Lincoln MKZ is more lavishly equipped than the typical BMW 3-Series, and that the average MKZ returns Ford a unit profit that is at least comparable to the 3-Series.

[NickF1011]

Mercedes' AMG products, I am sure, contribute very little to the brand image that the typical Mercedes buyer carries in his head.

 

I wasn't even referring to AMG or M or anything else. I was referring to entire models, like the SL, SLK, 6-series, IS, GS, G35, M45, etc. Lincoln offers nothing even remotely similar. Closest they get is a limousine-suspension MKS with a powerful engine (less powerful than its Ford counterpart might I add).

 

IMO, Lincoln customers now and future, are little impressed by sporty products. If they were, they'd be shopping elsewhere.

 

If you haven't noticed, most of them are.

 

I would say that Lincoln's products now are among the most profitable vehicles in their segments.

 

And that would continue to be a great thing...if they could sell more than a thousand of them a month in their most key segments.

 

Lincoln is going to eventually need to be more than a tarted up Ford if it's going to continue to be profitable in the future. As the Ford brand improves, Lincoln needs to improve even more to keep a meaningful gap between them. It's already hard enough to justify the premium being charged for the MKZ over a Fusion SEL. The lack of MKZ sales seems to suppot that argument. It has to be one of the worst-selling intro-level "luxury" cars on the market today.

Edited May 4, 2010 by NickF1011

[Deanh]

The body style really doesn't matter. Even if the Lincoln looks completely different from its Ford counterpart, if it is offering all of the same equipment and performance, then what makes it worth any more to the consumer?

easy, Lincoln is Toyotas Lexus, Nissans Infiniti...Hyundais Genesis.....

[NickF1011]

easy, Lincoln is Toyotas Lexus, Nissans Infiniti...Hyundais Genesis.....

 

Lexus and Infiniti offer vehicles completely different than those available at your local Toyota or Nissan dealer. I'm not just talking sheet metal. What is the Toyota equivalent (in the U.S. before anyone says it) of the Lexus IS, GS, LS, or SC? What about the Nissan version of the G (the 370Z sort of comes close to the G coupe...sort of) or M sedans?

 

Genesis...well...the jury is still out on how successful that experiment will be in the long run. And do we really want Lincoln to become nothing more than a Genesis-like sub-brand of the blue oval? It has more potential than that.

 

One thing that has always made me curious: Why is it that manufacturers like Toyota and Nissan can afford to develop unique luxury vehicles like those I listed above, even if they sell in low volumes, and Ford mysteriously cannot? Ford has the overseas donor platform for several similar type vehicles available in the Falcon. What is the big roadblock that Ford cannot overcome where the others can?

[Deanh]

Lexus and Infiniti offer vehicles completely different than those available at your local Toyota or Nissan dealer. I'm not just talking sheet metal. What is the Toyota equivalent (in the U.S. before anyone says it) of the Lexus IS, GS, LS, or SC? What about the Nissan version of the G (the 370Z sort of comes close to the G coupe...sort of) or M sedans?

 

Genesis...well...the jury is still out on how successful that experiment will be in the long run. And do we really want Lincoln to become nothing more than a Genesis-like sub-brand of the blue oval? It has more potential than that.

 

One thing that has always made me curious: Why is it that manufacturers like Toyota and Nissan can afford to develop unique luxury vehicles like those I listed above, even if they sell in low volumes, and Ford mysteriously cannot? Ford has the overseas donor platform for several similar type vehicles available in the Falcon. What is the big roadblock that Ford cannot overcome where the others can?

I would say the situation parralels Ford? lincoln pretty well...look at the ES models...and when it really comes down to it the Lexus Lineup is just a glorified blinged Toyota lineup, at least it definitely was when first initiated but it has progressed somewhat. why cant Lincoln do the same....and for all intents and purposes Infinitis are rebodies and up marketed Nissans...fact is the body style differences are substantial...but theres really minimal upgrades froom loaded maximas and the like...except when you get to the flagships and their drivetrains.....hell...same could be said for Acura....Lincolns doing the same thing, however its in its gestation.....baby steps....I say the game changer could/ would be the MKR...

[NickF1011]

I would say the situation parralels Ford? lincoln pretty well...look at the ES models...and when it really comes down to it the Lexus Lineup is just a glorified blinged Toyota lineup, at least it definitely was when first initiated but it has progressed somewhat. why cant Lincoln do the same....and for all intents and purposes Infinitis are rebodies and up marketed Nissans...fact is the body style differences are substantial...but theres really minimal upgrades froom loaded maximas and the like...except when you get to the flagships and their drivetrains.....hell...same could be said for Acura....Lincolns doing the same thing, however its in its gestation.....baby steps....I say the game changer could/ would be the MKR...

 

In the United States there is no Toyota platform equivalent of the Lexus IS, GS, LS, and SC. That's half of Lexus's lineup. Yes, the core of their lineup are the ES and RX, but they offer a whole lot more.

 

In the United States there is no Nissan platform equivalent of the Infiniti G (again, unless you want to compare a 2-seater to a coupe/sedan) or M. That's half of Infiniti's lineup.

 

Even Acura at least offers a couple models (RDX,TSX, RL) that aren't reskins of existing American Honda products.

 

It's far beyond Lincoln's lineup of platform mates (MKT) and dang near clones (everything else).

Edited May 4, 2010 by NickF1011

[Deanh]

In the United States there is no Toyota platform equivalent of the Lexus IS, GS, LS, and SC. That's half of Lexus's lineup. Yes, the core of their lineup are the ES and RX, but they offer a whole lot more.

 

In the United States there is no Nissan platform equivalent of the Infiniti G (again, unless you want to compare a 2-seater to a coupe/sedan) or M. That's half of Infiniti's lineup.

 

It's far beyond Lincoln's lineup of platform mates (MKT) and dang near clones (everything else).

Nick, most consumers dont know that or even care...if the appearences differ enough as far as the public is concerned they are different cars....thus Mercurys quandry....as for ford using the same platforms...I say cudos , and purely from the financial aspect....( and isnt the G series based on the maximas platform/ drivetrain? and most of the Lexus powertrains are eerily similar to a Toyota equivilent no?)

[Deanh]

In the United States there is no Toyota platform equivalent of the Lexus IS, GS, LS, and SC. That's half of Lexus's lineup. Yes, the core of their lineup are the ES and RX, but they offer a whole lot more.

 

In the United States there is no Nissan platform equivalent of the Infiniti G (again, unless you want to compare a 2-seater to a coupe/sedan) or M. That's half of Infiniti's lineup.

 

Even Acura at least offers a couple models (RDX,TSX, RL) that aren't reskins of existing American Honda products.

 

It's far beyond Lincoln's lineup of platform mates (MKT) and dang near clones (everything else).

put a Flex and MKT side by side....99% wouldnt know they were even related......

[NickF1011]

Nick, most consumers dont know that or even care...if the appearences differ enough as far as the public is concerned they are different cars....thus Mercurys quandry....as for ford using the same platforms...I say cudos , and purely from the financial aspect....( and isnt the G series based on the maximas platform/ drivetrain? and most of the Lexus powertrains are eerily similar to a Toyota equivilent no?)

 

The G is based on the same platform as the Z. It is RWD. The Maxima is still FWD. And I don't know of one Toyota car that offers a V8 (or RWD for that matter). Lexus offers 4.

 

put a Flex and MKT side by side....99% wouldnt know they were even related......

 

They wouldn't know they are related maybe, and that is currently Lincoln's most unique model, but does it still offer enough uniqueness to make it inherently more valuable than the Flex? It's as close as Lincoln comes at the moment.

[Deanh]

The G is based on the same platform as the Z. It is RWD. The Maxima is still FWD. And I don't know of one Toyota car that offers a V8 (or RWD for that matter). Lexus offers 4.

 

 

 

They wouldn't know they are related maybe, and that is currently Lincoln's most unique model, but does it still offer enough uniqueness to make it inherently more valuable than the Flex? It's as close as Lincoln comes at the moment.

like I said, baby steps...they are right where Lexus and Infiniti were when they started off...and there it is, i knew the G's were based on a Nissan, just got em mixed up, as for Lexus, obviously mopre extreme, but the "hybrid" and Es and their pseudo SUV are all toyota based no, and I would venture possibly their three best sellers...why?...totally.slightly different top hats, interior upgrades, status and perception ( image ) I feel Lincoln may take the same roads....and i really DO see RWD platforms perhaps rearing their heads.....eventually

[Deanh]

The G is based on the same platform as the Z. It is RWD. The Maxima is still FWD. And I don't know of one Toyota car that offers a V8 (or RWD for that matter). Lexus offers 4.

 

 

 

They wouldn't know they are related maybe, and that is currently Lincoln's most unique model, but does it still offer enough uniqueness to make it inherently more valuable than the Flex? It's as close as Lincoln comes at the moment.

sigh/ side note ....imagine a MKR with a RWD platform and an eco 4.5.........

[NickF1011]

like I said, baby steps...they are right where Lexus and Infiniti were when they started off...and there it is, i knew the G's were based on a Nissan, just got em mixed up, as for Lexus, obviously mopre extreme, but the "hybrid" and Es and their pseudo SUV are all toyota based no, and I would venture possibly their three best sellers...why?...totally.slightly different top hats, interior upgrades, status and perception ( image ) I feel Lincoln may take the same roads....and i really DO see RWD platforms perhaps rearing their heads.....eventually

 

The HS is based on the Toyota Avensis, not sold in the U.S. (so there's another one). Obviously the ES is a reskinned Camry and the RX is based on the same platform as the Highlander.

 

I'll accept that Lincoln's core models must remain somewhat related to existing American Ford vehicles, but what about the rest of the lineup? That's where Lincoln loses overall image points. As a brand, they offer nothing substantially different than what you can buy at your local Ford dealer. And that is where Lincoln differs with most (all) other luxury brands (that have mainstream counterparts anyway) doing business in the U.S.

 

I suppose I should count my blessings and be glad that Lincoln didn't become Chrysler. :lol:

[Deanh]

The HS is based on the Toyota Avensis, not sold in the U.S. (so there's another one). Obviously the ES is a reskinned Camry and the RX is based on the same platform as the Highlander.

 

I'll accept that Lincoln's core models must remain somewhat related to existing American Ford vehicles, but what about the rest of the lineup? That's where Lincoln loses overall image points. As a brand, they offer nothing substantially different than what you can buy at your local Ford dealer. And that is where Lincoln differs with most (all) other luxury brands (that have mainstream counterparts anyway) doing business in the U.S.

 

I suppose I should count my blessings and be glad that Lincoln didn't become Chrysler. :lol:

I believe that will change...I was very curious ( and questioned ) why all the hub-bub surrounding the MKc, and the fact I have seen it shot in several colors leads me to believe it is , in some iteration, being pursued.....I also believe their pursuit of obtaining their "identity" is being handled deliberately, and rather conservatively, which given todays volitile market, is wise to say the least. But dont dismiss them....the toes are testing the water.....

Edited May 4, 2010 by Deanh

[Deanh]

The HS is based on the Toyota Avensis, not sold in the U.S. (so there's another one). Obviously the ES is a reskinned Camry and the RX is based on the same platform as the Highlander.

 

I'll accept that Lincoln's core models must remain somewhat related to existing American Ford vehicles, but what about the rest of the lineup? That's where Lincoln loses overall image points. As a brand, they offer nothing substantially different than what you can buy at your local Ford dealer. And that is where Lincoln differs with most (all) other luxury brands (that have mainstream counterparts anyway) doing business in the U.S.

 

I suppose I should count my blessings and be glad that Lincoln didn't become Chrysler. :lol:

seeing the HS on the road i think immediately of a pimped out Corolla....AWFUL.

[PREMiERdrum]

I believe that will change...I was very curious ( and questioned ) why all the hub-bub surrounding the MKc, and the fact I have seen it shot in several colors leads me to believe it is , in some iteration, being pursued.....I also believe their pursuit of obtaining their "identity" is being handled deliberately, and rather conservatively, which given todays volitile market, is wise to say the least. But dont dismiss them....the toes are testing the water.....

 

And I'll say again...

The MKC was a styling exercise for the Lincoln version of the next-gen Escape. :reading:

[Deanh]

The HS is based on the Toyota Avensis, not sold in the U.S. (so there's another one). Obviously the ES is a reskinned Camry and the RX is based on the same platform as the Highlander.

 

I'll accept that Lincoln's core models must remain somewhat related to existing American Ford vehicles, but what about the rest of the lineup? That's where Lincoln loses overall image points. As a brand, they offer nothing substantially different than what you can buy at your local Ford dealer. And that is where Lincoln differs with most (all) other luxury brands (that have mainstream counterparts anyway) doing business in the U.S.

 

I suppose I should count my blessings and be glad that Lincoln didn't become Chrysler. :lol:

if Chrysler becomes a Alfa conduit, my opinion may change a tad....always had a passion for the Alfettas and the like, rear transaxles great weight distribution and a hoot to drive...screw all the issues....BELLISIMO!

[RichardJensen]

If you haven't noticed, most of them are.

Lincoln customers by definition are buying Lincoln products.

 

Furthermore, Lincoln has picked up market share over the past 3 years. The new range of cars has not cost them market share. They must obviously be doing something to acquire new customers, even if it is nothing more revolutionary than offering the traditional Lincoln package in new and different wrappers.

As the Ford brand improves, Lincoln needs to improve even more to keep a meaningful gap between them.

And the only way you see that happening is for Ford to make Lincoln a BMW-fighter?

 

Because that's the only thing I see you suggesting: "Lincoln needs to be more sporting, and it needs a multi-billion dollar investment"

 

Sorry. I don't buy it. As far as I'm concerned, you do that and you turn Lincoln into Jaguar. A leech on the Ford Motor Company, not a contributor to its success.

 

To dramatically and I mean dramatically increase the amortized cost of a product without generating a corresponding increase in product volume will severely crimp the profit potential of the Lincoln lineup.

 

If you increase the cost of developing a new Lincoln by 50% (or more, by giving Lincoln bespoke platforms), and only increase the volume of Lincolns sold by 30%, you have lost ground. Sure, you're selling more Lincolns, but you're making less money in the process.

 

BMW (and Mercedes) can BURY Ford when it comes to investment in luxury products. Ford can only afford to be a bit player, cultivating their niche, and staying well within it.

 

Let's say, for argument's sake, that 3% of the ATP of a vehicle goes toward platform amortization--paying down the costs of developing the platform.

 

BMW sells a quarter million 3-Series, worldwide, at, say $38k per. That's $285M per year in funding. Over five years, that's $1.425B.

 

Now say Ford sells 10k MKZs in the US and another 3k overseas--a most optimistic assumption for a putative new sporty Lincoln MKZ, at, say, $38k (we'll even give them the same ATP, even though the MKZ probably carries a lower one).

 

That's 156,000 MKZs per year. Over 5 years that comes to $889.2M

 

Now, to keep up with the Joneses, Ford will need to toss in another $540M sourced from elsewhere in the company, in order to keep up--either that, or they'll have to fall behind.

 

This is exactly the problem Ford had with Jaguar. Jaguar's volume would not sustain the kind of ongoing investment necessary to compete with BMW & Mercedes, so Ford needed to repeatedly inject cash from elsewhere to keep Jaguar's products marginally competitive with the Germans.

 

That's what GM has found out with Cadillac, and that's why they're retreating to Zeta, Epsilon, and whatever they call the platform underpinning the SRX, abandoning the exclusive Sigma platform strategy.

 

---

 

Granted, Ford's current strategy with Lincoln is -not- glamorous. But one of the great failings of Detroit over the years, is to get too absorbed in the glamor of the business, at the expense of, well, the business side of things.

 

Lincoln profits will pay for greater differentiation from Ford, but I would not expect them to pay for differentiation to the extent that you would like, Nick.

Edited May 5, 2010 by RichardJensen

[NickF1011]

Lincoln customers by definition are buying Lincoln products.

 

Furthermore, Lincoln has picked up market share over the past 3 years. The new range of cars has not cost them market share. They must obviously be doing something to acquire new customers, even if it is nothing more revolutionary than offering the traditional Lincoln package in new and different wrappers.

 

Gaining market share from a time when your entire lineup consisted of the LS, Town Car, and Navigator shouldn't really impress anybody. Yes, Lincoln customers by definition are buying Lincolns. But there should be a lot more Lincoln customers out there, and if Ford doesn't try to widen the net that attracts people to the Lincoln brand, it's not going to succeed in the long term.

 

And the only way you see that happening is for Ford to make Lincoln a BMW-fighter?

 

Because that's the only thing I see you suggesting: "Lincoln needs to be more sporting, and it needs a multi-billion dollar investment"

 

When did I ever use the words "BMW-fighter"? EVERY luxury automaker offers vehicles that are sportier than anything Lincoln offers. That's the cost of entry these days. You don't have to immitate BMW and make every one of your vehicles tightly-sprung and wound high, but you do need to offer what many luxury car buyers are looking for, which are vehicles that appear to be far sportier and luxurious than mainstream counterparts. Right now, Lincoln does not really offer that, unless a split-wing grille somehow makes a vehicle better than a Ford.

 

Lincoln profits will pay for greater differentiation from Ford, but I would not expect them to pay for differentiation to the extent that you would like, Nick.

 

If they won't, Ford is doing something wrong. Why can the other guys successfully do it with their luxury brands and Ford cannot?

[akirby]

The "unique to the U.S." Lexus platforms are also used in Europe and Asia so they're not purpose built just for the U.S. - that's how they can get away with dismal sales figures on the GS and IS here in the states.

 

That situation helps Ford with things like the Fiesta and Focus and TC but there is no worldwide presence for Lincoln or higher end Ford vehicles.

[NickF1011]

The "unique to the U.S." Lexus platforms are also used in Europe and Asia so they're not purpose built just for the U.S. - that's how they can get away with dismal sales figures on the GS and IS here in the states.

 

That situation helps Ford with things like the Fiesta and Focus and TC but there is no worldwide presence for Lincoln or higher end Ford vehicles.

 

So why doesn't Ford offer any similar such vehicles elsewhere in the world so they can do the same thing? Oh wait. They do. Falcon anybody?