Well, almost One Ford. There is, of course, still Lincoln.
As I’ve noted several times before, Ford’s treatment of what was one of America’s great luxury brands has been a travesty. America’s presidents and captains of industry once rode in Lincolns; today most people think of Lincolns as glorified taxicabs rattling around the streets of Manhattan or gussied-up Fords with delusions of grandeur.
But there’s a growing realization inside World Headquarters in Dearborn that Ford really needs Lincoln. Not the Lincoln of the cynical badge-engineering, or the stone-age technology, or the muddled product planning that we’ve been subjected to over the past few decades, but a Lincoln that is a genuine, high-value American luxury car brand. Here’s why: The golden age of the pickup truck is over.
Back in 2005 Ford sold 901,463 F-series trucks. Sales have declined every year since – 796,039 in 2006, 690,589 in 2007, 515,513 in 2008, and collapsing to 413,625 in 2009 as the recession bit deep. Last year saw a rebound, with sales reaching 528,349, and to the end of May this year F-series sales were up 10 percent on the same period in 2010. But no-one inside Ford expects a return to the big numbers of 2005. The world has changed.
Former Porsche CEO Wendelin Wiedeking once famously declared: “No-one needs a Porsche.” Now an F-150 is certainly more useful than a 911, but a significant number of people who purchased one in the past 20 years didn’t really need its hard-working load carrying or towing capacity, either. F-150s were relatively cheap to buy, delivered the relaxed driving experience many Americans liked, and looked cool, especially as alloy wheels, metallic paints and lavishly equipped interiors became commonplace. But as gas prices continue to increase, an F-series truck that doesn’t actually work for a living – whether on a construction site, or hauling the family boat to the lake every weekend – starts to look like an indulgence.
The F-series also faces major challenges meeting new CAFE rules that mandate a 19-20 percent improvement in fuel economy by 2016. The new rules don’t mean the end of the road for full-size pickups, but they will become more expensive and specialized as manufacturers spend money on more efficient powertrains and mass reduction to help meet the fuel economy targets. Those who once bought an F-150 just for the tough-guy image will be even less inclined to do so in the future.
Like all full-size pickups, F-150s are hugely profitable, partly because they are built in large volumes, partly because they are relatively low-tech, and partly because their development and manufacturing costs can be amortized over a much longer lifecycle than a car. What Ford insiders have realized is the slow-down in full-size pickup sales means the company is facing a disproportionately large – and most likely permanent – impact on its profitability.
This is where Lincoln comes in. While not in the full-size pickup truck league, luxury cars can also deliver juicy profits. While the precise numbers are a closely guarded secret, there’s surprisingly little difference between the cost of the materials used to build a Ford Fusion and those used to build a BMW 3-series, for example. Yet one sells for a considerable premium over the other. All Ford needs to do is build a Lincoln it can sell for BMW money. Which is easier said than done.
“They are trying like hell to resurrect Lincoln,” GM CEO Dan Akerson recently told the Detroit News. “Well, I might as well tell you, you might as well sprinkle holy water. It’s over.” Of course the GM boss is going to diss the opposition, but Akerson also speaks from the perspective of a man whose own company is trying to execute basically the same profit substitution strategy with Cadillac – and is learning just how damned difficult it is even with a brand that has a 10-year head start on Lincoln in terms of its resurrection.
Akerson’s contention in the same Detroit News story the new small Caddy sedan (which won’t be called ATS) and the new XTS “won’t blow the doors off” the luxury car opposition is refreshingly realistic. BMW was not built in a day: The company that is now one of the world’s blue-chip automotive brands was basically broke and building tiny cars under license from an Italian scooter manufacturer at the start of the 1960s. It took more than a decade for BMW to discover its mojo, in the form of the BMW 2002, and two more decades of consistent application and execution to embed it deep in its brand DNA.
I would argue the current CTS – sedan, wagon, and coupe – is the reborn Cadillac’s mojo car, its BMW 2002, if you will. And, as Dan Akerson clearly realizes, it’s going to take another 10 years of hard work before Cadillac is truly considered a BMW, Benz and Audi rival on a portfolio basis. Lincoln’s mojo car; the car that defines it as a credible 21st century luxury brand? As of right now, it doesn’t exist.
An even bigger problem, though, is a shortage of suitable vehicle architectures to underpin a re-invented Lincoln line-up. Audi has proven rear-drive is not necessarily de riguer for a luxury brand (though prior to the development of the current A4, A5, A6 and A7 models, moving those cars to a rear-drive platform was seriously studied). Ford could build a 3-series sized, front-drive Lincoln on the new Focus hardware, and a 5-series sized, front-drive model on the forthcoming Fusion/Mondeo platform (and as GM has finally understood after two generations of “tweener” CTS models, there is no point trying to buck the system that has worked so successfully for the Germans).
But what about a Lincoln flagship? The D4 platform that underpins the slow-selling MKS sedan (just 908 were sold in May, compared with 4288 Cadillac CTS models) and that bizarro MKT thingy is old, heavy, and simply not big enough to deliver the broad shouldered interior package expected of a luxury sedan intended as an all-American 7-series, S-class alternative – shortcomings amply evident in the new Explorer. And as far as I am aware, that platform’s not going away soon: a Ford source told me in Europe a few months back the D4 “gets one more go ’round”.
Ford has nothing else it can use for a big car. The arthritic Panther platform, which has done sterling service under the Town Car and the Crown Vic, is finally being pensioned off after an epic 31-year run. The next-gen Mustang, which will appear in time to celebrate the 50th anniversary of the Ford’s storied ponycar in 2014, will likely use a revised version of the current platform, probably with a new independent rear axle. Ford Australia’s unique , locally developed rear-drive Falcon platform is due for replacement, but with Falcon sales at their lowest level in 51 years, that no longer makes economic sense. Heavy hints from senior Ford sources suggest the current Falcon will stay in production until 2016 or 2017 and then be merged with the next-gen Taurus.
That may give Ford the volume to justify a new large FWD/AWD platform to replace the D4; a new platform that could conceivably also underpin a credible Lincoln flagship. But can it afford to wait that long? Especially as whispers out of Detroit Cadillac will almost certainly have a new 7-series, S-class sized flagship – a car bigger than the forthcoming XTS – on the road by 2015 (along with the 3-series sized Alpha models that begin to arrive 2013).
Being unfashionably late to the luxury car party is just one of the potholes on Lincoln’s road to redemption, however. Total Lincoln sales last year totaled just 85,828 vehicles, down from 131,487 in 2007, and this year’s running rate looks worse. Lincoln also has no market presence outside North America. Ford has a lot of rebuilding to do, and it’s difficult to see Lincoln offsetting anything more than a fraction of its lost truck sales revenue anytime soon.
The decades of cynical neglect and cheapskate product planning are coming home to roost. Lincoln is in a pitiful state. It desperately needs Ford’s love. But not as much as Ford now needs to love Lincoln.
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