rmc523 Posted August 27, 2019 Share Posted August 27, 2019 https://www.autoblog.com/2019/08/27/lincoln-car-dealerships/ Lincoln is once again looking at ways to stand out from parent company Ford and establish itself as a credible player in the luxury segment. The company has returned to its plan for standalone showrooms to give its sales and image a boost. In 2018, Lincoln asked 150 Ford-Lincoln dealerships in its 30 biggest American markets to make plans for a standalone showroom by July 2019, and inaugurate it by July 2021. Of those stores, 72 signed on — but the others resisted, partly because the move requires investing millions of dollars. Lincoln put the campaign on hiatus in December 2018, and now Automotive News has learned it's ready to relaunch the plan after finding a middle ground that satisfies both executives and store owners. The publication said dealers gained more freedom to choose how big of a store they build; square foot requirements are no longer tied to the market size. Lincoln also agreed to treat dealers who don't comply more fairly, notably by reducing financial penalties, and it made the aforementioned deadlines more flexible. Standalone Lincoln stores must now be completed by July 2022. The move makes sense, at least on paper. As Autoblog reported in 2018, research shows dealers with standalone showrooms sell more cars. The handful of Lincoln retailers that sell cars in purpose-built showrooms have seen their sales increase considerably faster than those who display the firm's models next to Ford-badged vehicles. Customers "want to buy a luxury product in a luxury environment," explained Robert Parker, Lincoln's head of marketing, at the time. I think it's a good idea, especially as the brand becomes stronger with better products. They need to separate themselves from the Ford rebadge image as much as they can. 2 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted August 27, 2019 Share Posted August 27, 2019 Ford's plan for standalone Lincoln dealerships should have been done when the Mercury brand was shut down in 2011. Back then, most Lincoln-Mercury dealership locations were physically separate from Ford dealerships. A lot of those standalone L-M dealerships got shut down entirely. For example, North Hills Lincoln Mercury in Fort Worth. At that point, the combined Ford-Lincoln facilities became more common. For example, Don Davis Ford-Lincoln in Arlington. Quote Link to comment Share on other sites More sharing options...
Wheeling Posted August 27, 2019 Share Posted August 27, 2019 This is the single most important reason people associates Lincoln to Ford. So Lincoln/Ford has nobody else to complain. The separation should have been done years ago. 2 Quote Link to comment Share on other sites More sharing options...
akirby Posted August 27, 2019 Share Posted August 27, 2019 They’ve been trying to get standalone dealerships for almost a decade if not longer. It takes a big financial commitment from the dealer and up until recently the products were a little thin to support a standalone dealer. 3 Quote Link to comment Share on other sites More sharing options...
tbone Posted August 27, 2019 Share Posted August 27, 2019 52 minutes ago, rperez817 said: Ford's plan for standalone Lincoln dealerships should have been done when the Mercury brand was shut down in 2011. Back then, most Lincoln-Mercury dealership locations were physically separate from Ford dealerships. A lot of those standalone L-M dealerships got shut down entirely. For example, North Hills Lincoln Mercury in Fort Worth. At that point, the combined Ford-Lincoln facilities became more common. For example, Don Davis Ford-Lincoln in Arlington. While I don’t disagree with you, I don’t think Lincoln had sufficient products to sustain standalone stores back then. 3 Quote Link to comment Share on other sites More sharing options...
Dequindre Posted August 28, 2019 Share Posted August 28, 2019 It may be an easier sell now that Lincoln has some compelling products and definitive future product plans. I could see why dealers would have been hesitant to make this move in the past 5 or so years. 3 Quote Link to comment Share on other sites More sharing options...
paintguy Posted August 28, 2019 Share Posted August 28, 2019 After encouraging stand-alone Lincoln-Mercury dealerships and then starving them for desirable product, how fast would you be to sign up? Dealers seem to be hedging their bets by investing in foreign makes. With that said recently I have visited a Lincoln dealership and a Lexus dealership. While the Lincoln dealer was friendly, not the upscale experience of Lexus. Hard enough to convince a customer to buy a $50- $100K vehicle. Convince a business owner to risk millions. Quote Link to comment Share on other sites More sharing options...
Wheeling Posted August 28, 2019 Share Posted August 28, 2019 In this transitional period, I think Lincoln should also lower their prices to meaningfully below the Germans, to establish a healthy volume first. They can then slowly increase the prices to compete with the Germans. Some reviewers already made the comments that because it is a Lincoln, it is not a good value, although it is a great SUV. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted August 28, 2019 Share Posted August 28, 2019 8 minutes ago, Wheeling said: In this transitional period, I think Lincoln should also lower their prices to meaningfully below the Germans, to establish a healthy volume first. They can then slowly increase the prices to compete with the Germans. Some reviewers already made the comments that because it is a Lincoln, it is not a good value, although it is a great SUV. Some did that to establish a new brand like Lexus. But I think it would just make it that much harder to raise prices later. I think it’s a better strategy to keep prices higher but still competitive and adjust volume to match that demand, especially with best in class products. 2 Quote Link to comment Share on other sites More sharing options...
sullynd Posted August 28, 2019 Share Posted August 28, 2019 18 minutes ago, akirby said: Some did that to establish a new brand like Lexus. But I think it would just make it that much harder to raise prices later. I think it’s a better strategy to keep prices higher but still competitive and adjust volume to match that demand, especially with best in class products. And when Lexus came out there was a clear line between mainstream and luxury. Mainstream brands are expected to have all the same features as luxury brands. Cut Lincoln prices and you’ll be stepping on Fords, whereas thirty years ago there was a bigger gap between Lexus an Toyota. 2 Quote Link to comment Share on other sites More sharing options...
Wheeling Posted August 28, 2019 Share Posted August 28, 2019 I understand what you are saying, it makes sense. However, with a price point comparable to the Germans, people will be cross shopping and it will take longer to have the volume to sustain independent Lincoln dealers. In the end, it is unavoidable to associate Lincoln with Ford. It may be counter productive. Quote Link to comment Share on other sites More sharing options...
akirby Posted August 28, 2019 Share Posted August 28, 2019 7 hours ago, Wheeling said: I understand what you are saying, it makes sense. However, with a price point comparable to the Germans, people will be cross shopping and it will take longer to have the volume to sustain independent Lincoln dealers. In the end, it is unavoidable to associate Lincoln with Ford. It may be counter productive. Well they have $80K Navigators plus Nautilus and Corsair. It will be fine. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted August 28, 2019 Share Posted August 28, 2019 10 hours ago, Wheeling said: In this transitional period, I think Lincoln should also lower their prices to meaningfully below the Germans, to establish a healthy volume first. They can then slowly increase the prices to compete with the Germans. Some reviewers already made the comments that because it is a Lincoln, it is not a good value, although it is a great SUV. Excellent post Wheeling sir. Value for the money is one area Lincoln does poorly. But also something Lincoln can improve by lowering vehicle prices across the board immediately, while at the same time continuing to offer exclusive service-based experiences like Pickup & Delivery. That combination can help Lincoln grow its customer base. The brand struggles to attract new customers who don't already own Fords and Lincolns. Hyundai is using this "value" strategy for their Genesis brand and it has been a success. Quote Link to comment Share on other sites More sharing options...
akirby Posted August 28, 2019 Share Posted August 28, 2019 17 minutes ago, rperez817 said: Hyundai is using this "value" strategy for their Genesis brand and it has been a success. Says who? Quote Link to comment Share on other sites More sharing options...
sullynd Posted August 28, 2019 Share Posted August 28, 2019 Lincoln sold 10x as many vehicles as Genesis in 2018. 1 Quote Link to comment Share on other sites More sharing options...
Trailhiker Posted August 28, 2019 Share Posted August 28, 2019 The Ford dealer near me added Lincoln. The parking at the dealership is terrible. You will get blocked in. You will be lucky to escape. Quote Link to comment Share on other sites More sharing options...
jcartwright99 Posted August 28, 2019 Share Posted August 28, 2019 Here is the thing, I think Lincoln needs to have separate dealerships if they want to succeed in the long term. However, if i were a dealer i would be a little gun shy. Lincoln is trying to push out great products but we don't know if the Aviator and Corsair will be sales (volume) success for dealerships to survive on just yet. Quote Link to comment Share on other sites More sharing options...
akirby Posted August 28, 2019 Share Posted August 28, 2019 Don't forget Lincolns have longer warranties and more standard service so they'll make more off those items than a Ford dealer. And the profit margins should be a lot better on $75K Lincolns than $35K Fords. You don't need huge volume. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted August 28, 2019 Share Posted August 28, 2019 13 minutes ago, akirby said: Don't forget Lincolns have longer warranties and more standard service so they'll make more off those items than a Ford dealer. And the profit margins should be a lot better on $75K Lincolns than $35K Fords. You don't need huge volume. Is Lincoln profitable at all? Last year Ford CFO Bob Shanks said "most Lincoln products" were among the Ford vehicles in the U.S. losing money. Lincoln dealerships, and the Lincoln component of Ford-Lincoln dealerships, probably also run a loss on every new Lincoln vehicle they sell and have to make it up with service, F&I, used cars plus spiffs they get from Ford. Quote Link to comment Share on other sites More sharing options...
rmc523 Posted August 28, 2019 Author Share Posted August 28, 2019 18 hours ago, rperez817 said: Ford's plan for standalone Lincoln dealerships should have been done when the Mercury brand was shut down in 2011. Back then, most Lincoln-Mercury dealership locations were physically separate from Ford dealerships. A lot of those standalone L-M dealerships got shut down entirely. For example, North Hills Lincoln Mercury in Fort Worth. At that point, the combined Ford-Lincoln facilities became more common. For example, Don Davis Ford-Lincoln in Arlington. The problem was Lincoln didn't have the product to survive at their own dealerships, so while that'd have been ideal, it wouldn't have worked. 2 Quote Link to comment Share on other sites More sharing options...
Wheeling Posted August 28, 2019 Share Posted August 28, 2019 2 minutes ago, rmc523 said: The problem was Lincoln didn't have the product to survive at their own dealerships, so while that'd have been ideal, it wouldn't have worked. And that is why they should reduce the price to make the products more attractive and to increase the volume quickly, so that the stand alone dealers can survive. Do you want your 75K Lincoln to be serviced by a technician who is working on 35K Ford most of the day? 1 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted August 28, 2019 Share Posted August 28, 2019 1 hour ago, sullynd said: Lincoln sold 10x as many vehicles as Genesis in 2018. Yes sir, Genesis went through a transition period of its own in 2018. That year, it applied for licenses in each state for dealership franchises separate from the Hyundai brand. HMA halted imports on Genesis vehicles during this transition, when the number of Genesis dealerships dropped from 850 to about 400. That caused lower sales in 2018. https://www.wardsauto.com/dealers/genesis-mark-new-phase-repositioned-us-dealer-network Quote Link to comment Share on other sites More sharing options...
akirby Posted August 28, 2019 Share Posted August 28, 2019 54 minutes ago, rperez817 said: Is Lincoln profitable at all? Last year Ford CFO Bob Shanks said "most Lincoln products" were among the Ford vehicles in the U.S. losing money. Lincoln dealerships, and the Lincoln component of Ford-Lincoln dealerships, probably also run a loss on every new Lincoln vehicle they sell and have to make it up with service, F&I, used cars plus spiffs they get from Ford. They were when cars were more popular because they shared all their platforms and drivetrains with Ford so overhead was really low. Now that they're doing more differentiation and bespoke options and car sales dropped it might be worse but I would think with Navigator and Aviator pulling in high ATPs and Corsair and Nautilus filling in the low end that they should be doing pretty well. If they didn't think they could make a decent profit they would have killed Lincoln a long time ago. 1 Quote Link to comment Share on other sites More sharing options...
silvrsvt Posted August 28, 2019 Share Posted August 28, 2019 53 minutes ago, rperez817 said: Yes sir, Genesis went through a transition period of its own in 2018. That year, it applied for licenses in each state for dealership franchises separate from the Hyundai brand. HMA halted imports on Genesis vehicles during this transition, when the number of Genesis dealerships dropped from 850 to about 400. That caused lower sales in 2018. https://www.wardsauto.com/dealers/genesis-mark-new-phase-repositioned-us-dealer-network But yet Lincoln is still outselling it by roughly 4-5:1 as of Q2 of this year Lincoln 25,941 Genesis 5,805 Genesis Quote Link to comment Share on other sites More sharing options...
rperez817 Posted August 28, 2019 Share Posted August 28, 2019 1 hour ago, akirby said: If they didn't think they could make a decent profit they would have killed Lincoln a long time ago. I remember Alan Mulally came real close to pulling the plug on Lincoln about 10 years ago but apparently he changed his mind. Anyway, Ford's immediate concern with Lincoln shouldn't be profitability, but brand awareness which is very low. Looks like Ford is doing all the right things to improve that. Including the push for standalone dealerships. 1 Quote Link to comment Share on other sites More sharing options...
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