Lincoln's luxury on the cheap

[silvrsvt]

http://money.cnn.com/2012/12/04/autos/ford-lincoln-relaunch.fortune/index.html

 

So the first model from the new Lincoln, the 2013 MKZ, will be a fancy version of the 2013 Ford Fusion with a different look and nicer interior, and later models will also keep close company with their Ford cousins. The decision saves product development dollars but keeps Lincoln out of the top automotive tier where the fattest profits are.

 

Sounds like this guy needs to work on his research some more....

[RichardJensen]

It's Alex Taylor III. He won't be doing research because he already knows everything.

[Hugh]

It's CNN so it's got to be gospel for the masses!

"Jaguar and Land-Rover": After the sale and the work Ford (PAG) put into it and The new owners look like they gave the keys to the shop to the current managers. Simple orders: "Go make great cars as long as we get our monies worth."

 

VW/AUDI 'secret-sauce': Give me a F*%$ing break! Lexus/Infiniti share from their parents too. At least Hyundai is open at simply follow the trend and make it better.

[jpd80]

Again, writers judging Tier 2 Lincoln using Tier 1 Luxury standards and pre conditions.

Anyone doing a smidgen of research will know why Ford basically threw away Aston martin, Jaguar, Land Rover and Volvo.

The up front costs for full line product cycle in J/LR and Volvo was going to be horrendous and make Cadillac look like a small time player..

 

The profit in Luxury vehicles has an always will be the money not spent, Cadillac may easily double or triple Lincoln's sales figures

but look at the product investment needed to do that. That amount of investment demands a higher product volume to achieve ROI.

This is risk based stuff, Ford is not prepared to throw good money after bad into Lincoln on dedicated platforms to copy the Germans

Edited December 4, 2012 by jpd80

[Hugh]

Even if Lincoln wanted to go after that market and go toe-to-toe, that's not in the cards for a while. It's hard for the public to recognize Ford has Limited and Titanium top-end line which coinsided with what Mercury was in optics. GM has Buick, good for them! Just shoot your other foot off while ignoring the fact if you put some effort in Chevrolet, you wouldn't need Buick at all AFAIC. Lincoln has a mission statement that makes sense and folks who don't like it will not buy Lincoln or lament Mercury.

I'm watching and reading what some folks want from Lincon and from Mercury for that matter and it's fantasy. One or two HISTORIC products will not revive a brand. "Build it and they will come." That's Hollywood fallacy plain and simple. If the writers drive Audi and not say anything about the VW roots have blinders on AFAIC. No bad money after good Ford. Don't take a loan to pay for bad decisions and assume someone else will carry you to sort your s$%t out. Rant off...

[jpd80]

Or Lincoln could be like Volvo, about to spend $11 billion over 5 years on new product and three new plants,

you'd want to have a big set to put that much on the line and gamble that your income is going to be better..

 

It's what you don't spend that defines profitability in luxury cars, no one ever sees the savings, just the costs.

Lincoln's sales aren't great but the average transaction price is probably similar to Cadillac but Lincoln's

input costs are much lower but sadly, that is something Lincoln's most vocal critics fail to recognize....

Edited December 5, 2012 by jpd80

[twintornados]

What Ford needs to do is when they design the next crop of rear drive architecture for coupes and sedans is come out with the Lincoln version first...then everyone will call Mustang and Falcon a Lincoln with plainer metal around it...right??

[silvrsvt]

What Ford needs to do is when they design the next crop of rear drive architecture for coupes and sedans is come out with the Lincoln version first...then everyone will call Mustang and Falcon a Lincoln with plainer metal around it...right??

 

Very Doubtful...unless you want to wait till 2020 for a RWD Lincoln coupe...the Mustang is coming first, come hell or high water due to its 50th annverisity

 

I don't think there is an "easy" way to get rid of the notion that Lincolns are just tarded up Fords..when the vast majority of luxury cars do the same thing.

[Edstock]

A discussion with the lead designer on the MKZ:

 

http://jalopnik.com/5965077/chief-designer-of-lincoln-mkz-explains-why-its-not-a-hatch?tag=la-auto-show

[akirby]

What Ford needs to do is when they design the next crop of rear drive architecture for coupes and sedans is come out with the Lincoln version first...then everyone will call Mustang and Falcon a Lincoln with plainer metal around it...right??

 

That's what they did with the MKS. It came out first, then the new Taurus. But they still call it a "gussied up Ford".

[mettech]

The 500/Taurus was out several years before the MKS..

 

You know that..

[jpd80]

I think Lincoln on the cheap can be seen both ways:

 

MKZ Starting MSRP $35,925 x 1,335 sales = $48 Million

MKX Starting MSRP $39,545 x 1,065 sales = $42 million

MKS Starting MSRP $42,810 x 2,108 sales = $90 Million

MKT Starting MSRP $45,285 x 537 sales = $24 million

Navigator Starting MSRP $57,775 x 675 sales = $39 million

 

At absolute minimum MSRPs, those 5,732 Lincoln sales were worth at least $243.6 Million

with an average transaction price of at least $42,500

 

If these Lincolns are indeed just "gussied up Fords", like the armchair experts keep saying

then Ford motor must be making an absolute packet of each one..

Edited December 7, 2012 by jpd80

[akirby]

The 500/Taurus was out several years before the MKS..

That's what they did with the MKS. It came out first, then the new Taurus. But they still call it a "gussied up Ford".

 

I was referring to the new sheetmetal for the 2010 Taurus. The MKS came out with unique sheetmetal first, then the "new" Taurus came out after that with its own unique sheet metal.

[FordBuyer]

Even if Lincoln wanted to go after that market and go toe-to-toe, that's not in the cards for a while. It's hard for the public to recognize Ford has Limited and Titanium top-end line which coinsided with what Mercury was in optics. GM has Buick, good for them! Just shoot your other foot off while ignoring the fact if you put some effort in Chevrolet, you wouldn't need Buick at all AFAIC. Lincoln has a mission statement that makes sense and folks who don't like it will not buy Lincoln or lament Mercury.

I'm watching and reading what some folks want from Lincon and from Mercury for that matter and it's fantasy. One or two HISTORIC products will not revive a brand. "Build it and they will come." That's Hollywood fallacy plain and simple. If the writers drive Audi and not say anything about the VW roots have blinders on AFAIC. No bad money after good Ford. Don't take a loan to pay for bad decisions and assume someone else will carry you to sort your s$%t out. Rant off...

 

Something to remember:

 

Half of all VW profit comes from Audi. There is lots of profit to be made running a luxury division properly. And rich people aren't hurt as much in economic downturns as the middle class.

[Hugh]

Something to remember:

 

Half of all VW profit comes from Audi. There is lots of profit to be made running a luxury division properly. And rich people aren't hurt as much in economic downturns as the middle class.

Do you have the VW group spreadsheets that show where the money is going? If Audi is holding up VW/SEAT (not anymore) and the rest of the group, I say the main core (VW) is not puling it's weight. FORD would try to NEVER let that happen for Lincoln. As for the 'upper-class', the loss of jobs in the 'super yacht' industry and the gold bathroom fixtures (from faucets to toilets) would be considered 'fiscal restraint' to them. Too bad for the workers, I suppose your right in that respect. Edited December 7, 2012 by Hugh

[ice-capades]

Ford's CEO, Alan Mulally, wanted to drop the Lincoln franchise but listened to the Ford Board of Directors that felt that they had a case to re-establish the Lincoln nameplate with the right investment plan. The plan was put toigether with a long term objective while at the same time reorganizing the Lincoln dealership owner body. Lincoln dealers have to make substantial investments to remain as Lincoln deaers but Ford a/k/a Lincoln Motor Company is going to be very secretive about releasing future product plans until those all-new Lincoln models are close to production. They still need to complete the new Lincoln dealership footprint and don't want marginal Lincoln dealerships to hang on if Lincoln can get them to give up their frranchises before too much of the all-new Lincoln product is revealed!

[RichardJensen]

See, I live in a town with about a quarter million in the metro area, and over a million in the "Direct market area" (which is misleading, since its outer edges will go to Mpls or Omaha), and the Lincoln dealer is dualed with the Ford dealer on a prime piece of real estate with no room for a second showroom building.

 

And they have done nothing with Lincoln. In fact they don't even have a dedicated Lincoln sales area.

 

This same dealership group had Saturn, and then acquired Pontiac and Cadillac and then Hummer in the early 00s. They built a Hummer-spec showroom like two years before Hummer sales ended up in the toilet, and they just spent a fortune picking up BMW & Mercedes from another dealer and overhauling this dealership into a luxury center.

 

But they haven't spent a dime on Lincoln. Can't quite figure it out. Ford Motor should be more than willing to loan them the cash to do so on generous terms because they sell a lot of Fords, but there it sits. A single sign on a nondescript building with an MKS in the showroom next to a C-Max energi.

Edited December 8, 2012 by RichardJensen

[akirby]

I've long suspected that Ford was purposely holding back to try and cull the dealers.

[2005Explorer]

they just spent a fortune picking up BMW & Mercedes from another dealer and overhauling this dealership into a luxury center.

 

You would think they would want to move Lincoln into their luxury center, but then again I suppose service wise it makes sense to keep it at the Ford dealership. McKie in Rapid City does actually have a Lincoln building, however the new Lincolns actually sit with the new Fords and for the most part are sold out of the Ford building. The Lincoln building is pretty much used for used cars if that makes any sense. lol

[RichardJensen]

I don't think Ford wants Lincoln sold out of that complex.

[aneekr]

I think Lincoln on the cheap can be seen both ways:

 

MKZ Starting MSRP $35,925 x 1,335 sales = $48 Million

MKX Starting MSRP $39,545 x 1,065 sales = $42 million

MKS Starting MSRP $42,810 x 2,108 sales = $90 Million

MKT Starting MSRP $45,285 x 537 sales = $24 million

Navigator Starting MSRP $57,775 x 675 sales = $39 million

 

At absolute minimum MSRPs, those 5,732 Lincoln sales were worth at least $243.6 Million

with an average transaction price of at least $42,500

 

If these Lincolns are indeed just "gussied up Fords", like the armchair experts keep saying

then Ford motor must be making an absolute packet of each one..

 

Ford is facing a crisis of disruptive proportions in terms of their efforts to enter premium automobile market segments. Who will pay upwards of $35,000 for products that are completely undistinguished in any dimension, as are all current Lincoln models?

[Edstock]

Half of all VW profit comes from Audi.

 

Please cite data that shows this. Otherwise, all we have here is a brain-fart.

[RichardJensen]

Ford is facing a crisis of disruptive proportions

 

Edited December 8, 2012 by RichardJensen

[2005Explorer]

I think Lincoln on the cheap can be seen both ways:

 

MKZ Starting MSRP $35,925 x 1,335 sales = $48 Million

MKX Starting MSRP $39,545 x 1,065 sales = $42 million

MKS Starting MSRP $42,810 x 2,108 sales = $90 Million

MKT Starting MSRP $45,285 x 537 sales = $24 million

Navigator Starting MSRP $57,775 x 675 sales = $39 million

 

At absolute minimum MSRPs, those 5,732 Lincoln sales were worth at least $243.6 Million

with an average transaction price of at least $42,500

 

If these Lincolns are indeed just "gussied up Fords", like the armchair experts keep saying

then Ford motor must be making an absolute packet of each one..

 

You are only talking about total revenue here. You would also need to look at what is costs to design these vehicles, manufacture them and market them. I am sure there is plenty of money to be made, but remember even though your ATP might be somewhat higher then Ford (and I use somewhat because there is a load of money to be made on high level F-Series and Explorer models alone) the overall profit might not be amazing as you think.

 

With Lincoln's new direction I would also expect engineering costs to be much higher as well. Common platform or not I don't believe the Fusion or MKZ share many parts at all.

 

With that said, I don't think anyone would argue that even in it's currently weak state Lincoln isn't a money maker for Ford.

Edited December 8, 2012 by 2005Explorer

[jpd80]

Ford is facing a crisis of disruptive proportions in terms of their efforts to enter premium automobile market segments. Who will pay upwards of $35,000 for products that are completely undistinguished in any dimension, as are all current Lincoln models?

Last month 5,700 people did....they actually pad a whole lot more, like an average of at least $42,000 per sale