Lincoln to invest about $1 billion in new vehicles by 2014

Article by Christian Andrei, on June 21, 2011

In order to revive its luxury brand Lincoln, Ford Motor Co. aims to invest about $1 billion in new vehicles by 2014, according to Lincoln dealers. A couple of weeks ago in Dearborn, CEO Alan Mulally and the rest of Ford's leadership team met with Lincoln dealers from major metropolitan areas to assure them that Ford continues to be committed to the brand.

From January to May 2011, Lincoln’s U.S. sales didn’t reach 35,000 vehicles, standing for a 7.5% decrease compared to the previous year. This stood for less than 1% of the market in the U.S. Ford made a promise in 2010 that Lincoln would receive seven new or extensively upgraded vehicles within the next four years.

However, there have been no new Lincoln models displayed in the major auto shows that were scheduled so far this year. In addition, Ford is pressuring dealers to spend at least $1 million to upgrade their facilities. Last Monday, Lincoln spokesman Timothy Elliott said that the company is “fully committed” in its goal for Lincoln to be a world-class luxury brand with an impressive vehicle lineup that offers an outstanding consumer experience.

Nonetheless, there are many who are unconvinced about Lincoln’s future. Rebecca Lindland, a director with IHS Automotive Inc. in Lexington, Mass., said that Lincoln’s viability is doubtful. In an interview with The Detroit News, General Motors Co. CEO Dan Akerson said that Ford “might as well sprinkle holy water” on Lincoln.

IHS forecasts that Lincoln will add a compact sedan (a premium cousin to the Ford Focus) next year and that there will be a compact crossover in 2013 that will be offered as a 2014 model.

The automotive consultants at IHS anticipate that a majority of the new and upgraded Lincolns will arrive as 2014 models, such as a midsize crossover (a premium cousin to the Ford Explorer) and the next generation of the MKS full-size sedan.

By that time, the MKT (a sibling of the Ford Flex) will be ended. The Navigator full-size SUV may expire by 2016. However, Lincoln will be presenting new versions of the MKZ midsize sedan and MKX utility vehicle. The industry has yet to recover totally though.

For 2011, the seasonally adjusted sales rate was 11.8 million units in May. Lindland said that Lincoln could “miss some of the momentum." Bob Tasca Jr. is president of Tasca Automotive Group, which runs Ford and Lincoln showrooms in Cranston, R.I. “Very positive”, is how the chairman of the Lincoln Mercury Dealer Council describes the meeting in Dearborn.

Topics: lincoln, investment

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