Lincoln to launch ‘next chapter’ at NY show
Lincoln Motor Co. uses the New York auto show as its megaphone, and this year won’t be any different.
The luxury automaker’s future is going to look a lot like what was outlined in the Ford Motor’s two-year plan earlier in March. And Lincoln will open its SUV-laden “next chapter” Wednesday in New York when it shows the all-new Aviator ute.
The timing is crucial. Lincoln — like Ford’s Blue Oval — is in the midst of a lineup refresh. And those leading the brand are trying to channel the energy of Jim Farley, Ford president of global markets: They’re anxious to debut updated products with new names, to launch six all-new SUVs over the next several years.
They’re also ready to show a sales dip isn’t necessarily a death sentence, because Ford’s luxury brand is encountering headwinds this year. Sales were down 25 percent through the first two months of the year due in part to the company phasing out its MKX (to be redesigned and renamed “Nautilus” this year) and MKC SUVs as it readies to launch new models there later this year. Meanwhile, the MKZ sedan saw a 39 percent dip through February, and the plush Continental dropped 30 percent in the same time.
Those are big hits as the U.S. auto market shrinks slightly amid an industry-wide sales plateau that has luxury brands battling for market share. Crosstown competitor Cadillac this year is starting a six-month product cadence to flood its lineup with crossover and SUVs; Buick already has a flurry of SUVs. Meantime, Lincoln is bench-marking Acura, Infiniti, and Audi, which currently lead the luxury SUV market.
But Joy Falotico, the newly appointed group vice president of Lincoln, and Robert Parker, director of marketing, sales and service at Lincoln, say they aren’t flustered. Lincoln leaders — under Farley — have a calm confidence about them.
The new Navigator is stealing customers from Land Rover and Mercedes-Benz, the Lincoln executives say. Lincoln’s average transaction price is up $4,600 thanks to the all-new Navigator the company repeatedly says it can’t make enough of.
Since its launch last fall, more than 80 percent of all Navigators sold were either the $93,705 Black Label trim or $81,205 Reserve Trim. Lincoln’s incentive spending hasn’t increased since last year, while luxury carmakers’ incentives have increased more than $700 on average.
That’s an OK problem to have, according to Stephanie Brinley, product analyst with IHS Markit. Lincoln is making more money on a lower sales volume, and spending less money to lower the cost of its vehicles at the dealership.
“The Navigator (sales) are more indicative of where they’re going,” Brinley said. “They’re focusing on the quality of the sale. They’re in the right space. Based on Nautilus, my expectations are high.”
But a behemoth SUV can only carry the brand for so long. Lincoln’s new and refreshed SUVs will hit the market with a big job to do: carry the momentum built by Navigator.
The conversation around the brand has changed since the company launched the new SUV, likened by some to a living room on wheels. The company debuted its standard honeycomb grille on the Continental, but it’s the Navigator’s interior that sets it apart.
Coupled with the “lifestyle” perks Lincoln offers with its Black Label package — annual detailing, access to curated restaurants and additional service from the dealerships — the premium brand is pushing to play in the high-end luxury market.
Parker and others say all of that will carry into the Lincoln products set to debut over the next few years. First is the Aviator, expected to be bigger than the Nautilus, but smaller than the Navigator. After that, Lincoln will debut an unnamed SUV within the next 24 months. Four more vehicles will follow at some time after that.
Amplifying the interior design and materials also gives the brand more residual value, Parker said. Keeping incentive spending down is also important as leasing in the premium space Lincoln competes in grows. Once the vehicles come back to dealers, Lincoln needs to be able to make some money off them again.
The company is adopting Ford CEO Jim Hackett’s push for financial and operational fitness there, Parker said. The product plan that begins to roll out later this year with the Nautilus and MKC refresh will propel the company into a big 2019, he said.
Parker, who’s been in the business 29 years, said Farley’s vision for Lincoln is focused on the long term. Farley and Kumar Galhotra, the former Lincoln head who was recently promoted to lead North American operations, asked questions that looked out a decade or more.
“Lincoln was a collection of sprints,” Parker said. “You had a period of short bursts followed by, for various reasons, a bit of an energy lapse. We have a long-term strategy now. Jim (Farley) was looking a decade out. This is not even a marathon, this is one of those 100-mile races.
“There are things that are going to be a bit bumpy this year, but we know where we’re going. And it’s the right direction.”