Ford Motor Co wants to cut its dealership count for U.S. luxury brand Lincoln to about 325 from the current 434 in big metro areas, where it hopes to win over buyers of premium autos, Ford executives said on Sunday.
This is the same count that Ford signaled to its dealers last October when there were 500 dealers in the top 130 U.S. metro areas. However, it was the first time Ford confirmed those figures.
Those 130 metro markets hold about 85 percent of the U.S. luxury market.
Ford needs to increase the volume of Lincolns sold to make the brand viable and to keep profitable stand-alone Lincoln dealers, many who lost higher-volume brand Mercury sales when Ford killed it last year.
If we don't get the throughput in the major metro markets right-sized, then the transformation of Lincoln is going...to need a different plan, said Ford marketing chief Jim Farley. This transformation is going to hinge on several things working including the (dealer) network.
Ford is considering expanding Lincoln beyond North America in a few years, but Chief Executive Alan Mulally has said it needs to transform Lincoln into a competitive player in its home market before heading into Europe or Asia.
Mulally attended dealer meetings at the National Automobile Dealers Association annual convention but did not address dealers at franchise sessions held on Sunday for the Ford and Lincoln brands, Ford said.
Lincoln's 2010 sales rose only 3.6 percent versus 23 percent for Volkswagen's Audi and more than 25 percent for both Honda Motor Co's Acura and Nissan Motor's Infiniti and 35 percent for Cadillac of General Motors Co.
Beau Boeckmann, president of premium brands at a group of suburban Los Angeles dealerships including the top-selling Ford dealer Galpin Ford, said he was pleased with what he heard from Ford's executives about Lincoln at the franchise meeting.
They are making sure that Lincoln is going to be successful. They have people now (at Ford) who are waking up every day and just thinking about Lincoln, said Boeckmann.
Boeckmann said that in the past, Lincoln was not given the needed attention as Ford focused on fixing its flagship brand.
Ford's overall 2010 U.S. sales were 22 times more than Lincoln sales, compared with Toyota's overall U.S. sales being eight times more than Lexus sales.
Farley said that Lincoln will introduce six new or significantly refreshed Lincoln models that will be introduced in the next three years. The lineup will stand at seven models by then, including the Lincoln MKX crossover SUV that rolled out a few months ago.
Farley said that Lincoln will require that its dealers meet minimum requirements that are expected for consumers in the luxury market. The automaker will help finance showroom improvements by giving dealers a larger piece of the profit on new Lincoln sales.
Lincoln now has about 1,100 U.S. dealers including in smaller markets. Ford executives have not said how many of those dealers outside the largest 130 metro areas will be kept by the first wave of Lincoln vehicles are on the market.
(Editing by Anshuman Daga)