Last Updated Jun 20, 2011 3:12 PM EDT
Ford (F) has announced that it plans to spend -- wait for it -- one billion dollars reviving its flagging luxury marque, Lincoln. I've argued previously that Ford needs to fix Lincoln, but also that killing the brand wouldn't be a bad idea. My BNET colleague Jim Motavalli takes the opposite tack, arguing that Ford shouldn't subject Lincoln to the same fate as Mercury. Here's where he and I part ways.
A weak revival
As Jim points out, Lincoln has fallen into a black hole for sales, relative to its luxury peers. Here's the WSJ on Ford's master plan:
Ford is working on seven all-new or significantly upgraded vehicles that Lincoln will roll out over the next four years. It hopes to reposition Lincoln as a cross between the on-road performance of BMW AG and the interior comfort and refinement of Toyota Motor Corp.'s Lexus brand.Sounds great, but unfortunately, a cool billion isn't enough; that's the typical cost to develop a single new vehicle. It's going to be spread awfully thin over seven. At the moment, Lincoln's biggest problem isn't that the cars aren't nice -- they're rather refined, although not as frisky as their German competition (if you can call it that).
The auto maker sees the effort as the "last chance" for Lincoln to re-establish itself as a leading competitor in the luxury-car segment, said Mark Fields, Ford's president of the Americas, during a presentation two weeks ago, according to three dealers who attended the invitation-only event.
No, what's wrong with Lincoln is that it needs a rear-wheel drive platform. That went away when Ford axed the stodgy old Crown Victoria, a paleolithic monster built in the ancient body-on-frame manner, that did yeoman duty for decades as a limo, a taxi, and police interceptor. The gambit now will involve taking Lincoln's existing front-wheel-drive platforms and jiggering them to be all-wheel-drive.
AWD is fake luxury
Sure, AWD can yield a surefooted set of wheels (although for most drivers, I think it's totally useless). But as Honda's Acura luxury brand has discovered and stubbornly refuses to correct, outside of Audi, AWD doesn't cut in the top level of the luxury market. BMW makes high-performance RWD cars. Mercedes makes plush, plutocratic RWD sleds. Lexus makes ultra-reliable RWD conveyances. Cadillac produces aggressive, exotic, RWD rides.
I don't see Ford going there (although the possibility has been discussed). Worse, even maintaining a separate luxury division strikes me as deleterious to the superb work that Ford CEO Alan Mulally has done over the past half-decade to streamline Ford and project the company as a world brand with perhaps the finest lineup of cars and trucks in the auto industry.
Lincoln seems like needless frosting on all that. No amount of offbeat concept cars, like the rinky-dink Concept C, is going to change that.
Is this about the developing world?
What I think is really going on here isn't that Ford wants to become more competitive in the tough U.S. luxury market. Rather, the company the company doesn't want to give away the luxury market in developing regions, such as China and Latin America. Luxury buyers are proliferating in, for example, China. And if Ford doesn't chase them, it will be selling itself in high-growth regions as a mass-market brand only.
I'm not entirely sure why this is a bad idea. Lincoln is a leftover from the days when American automakers built brand ladders, moving customers up from entry level to luxe over a lifetime. Nowadays, folks are less focused on that distinctly middle-class 20th century experience and more interested in quality and features. That would be a better place to invest Ford's extra billion.