Ford tells Lincoln dealers to invest more or they will lose the franchise

Article by Christian Andrei, on October 12, 2010

Ford announced that Lincoln dealers will have until early January to make a life-or-death decision: they have to meet the brand’s new standard and invest more or simply lose the franchise. It’s not a secret anymore that Ford will drop 200 of its almost 1,200 franchises, in order to rehabilitate the sagging luxury brand.

Ford wants to reduce the number of dealers found in metro markets. "Dealers will decide," said Mark Fields, Ford Motor Co.'s president of the Americas.

Currently, less than 35 percent of all Lincoln dealers meet Ford’s standards, and in order to make the brand more competitive fords needs to increase U.S. sales, sales per dealership, loyalty rates and residual value.

Back in 1998, Lincoln was the top U.S. luxury brand with 187,121 sales, but things have changed since then, and Lincoln sold only 82,847 last year, which means less than half those of market leaders Lexus, BMW and Mercedes-Benz.

"Dealers know it's screwed up," said Bob Tasca Jr., a Rhode Island dealer and head of Lincoln's dealer council. "We are looking for a chance to change. It has to change, because the way it is isn't working."

Ford has big plans with Lincoln since Mercury brand was axed as it plans to introduce seven new or remodeled Lincoln vehicles in the next four years. Also, Ford wants to improve customer experience. The severance package for dealers who decide against the upgrades was not announced at the press event last week. [via autonews - sub. required]

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