Is Ford Finally Turning Lincoln Around?
May 1st 2013 7:01PM
Updated May 1st 2013 7:30PM
The turnaround of Ford has been one for the history books. Ford was a mess back in 2006, but lately, nearly everything it touches turns out to be a shining success.
Everything, that is, except Lincoln - Ford's luxury brand.
Ford's sales have been strong, with its latest models posting impressive gains. But at least through the first quarter of 2013, the story was very different at Lincoln.
But now, finally, a bright spot: Sales of Lincoln's latest sedan, the MKZ, were up big in April.
Is a Lincoln turnaround finally taking hold?
A turnaround effort that has been stuck in neutral
While General Motors' efforts to turn around its Cadillac brand have produced great cars and rising sales, Ford's efforts with Lincoln haven't produced much of anything. The "Lincoln Motor Company", as Ford renamed it last December, has produced some striking designs, and some intriguing advertising, but until April, sales had remained... elusive.
But that just changed, at least for a month. Ford said on Wednesday that Lincoln's overall sales were up 21% in April, its first big monthly gain in a while. That gain was paced by the MKZ, which had its "best monthly sales performance ever", Ford said, with sales up a whopping 115% over the year-ago result posted by the model's predecessor.
Now, a cynic might say that the phrase "MKZ's best month ever" isn't saying much. And the cynic might be right. But at least in April, Ford's smallest Lincoln sedan handily outsold Cadillac's smallest sedan, the much-acclaimed ATS, by a big margin - 4,012 to 2,725. (But the MKZ still fell short of sales of its true rival, Toyota's Lexus ES, which sold 5,122 copies in April.)
That's worth taking notice. But does it mean that a Lincoln revival is finally taking hold? Let's take a closer look.
Did MKZ's botched launch lead to a short-term spike in demand?
That great April result for the MKZ comes, of course, after a few months of terrible sales - sales that were constrained by production problems. Early examples were plagued by quality issues: The car is produced at the same plant that produces Ford's hyper-popular Fusion sedan, and the plant was apparently stretching its resources thin to keep up with the Ford's demand.
Knowing that it needed the MKZ's launch to be a no-issues success, Ford responded with a complicated process to ensure that the MKZs going out the door met top standards of quality. That apparently worked - but it created a bottleneck, and cars were slow getting to dealers.
The upshot was a botched launch: Ford had spent big on advertising to re-introduce the Lincoln brand over the winter, with the MKZ as the centerpiece - but intrigued customers who went to Lincoln dealers found them short on cars.
That cost them a lot of sales - or at least, postponed them. In April, Lincoln's dealers finally had normal levels of inventory - and sales boomed. But was that just a bit of pent-up demand, or does Ford finally have a hit Lincoln on its hands?
The short answer: It's too early to tell. There's no doubt that April was a good month for Lincoln. But let's see how the next few months play out before we declare this a trend.
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The article Is Ford Finally Turning Lincoln Around? originally appeared on Fool.com.Motley Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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