Fortunately for Lincoln, Ford Motor Company (NYSE:F) has been on such a tear this year that the stumbles in its luxury brand have been largely overlooked – for now. That won’t always be the case, however. After the great recession, poor executive decisions, and bankruptcies forced upon General Motors Company (NYSE:GM) and Chrysler, Ford Motor Company (NYSE:F) opted to slash all of its global brands except its namesake Blue Oval and Lincoln.
Ford’s need for its luxury line can’t be understated; it’s extremely important as high-margin luxury customers have few valid options at Ford Motor Company (NYSE:F)/Lincoln dealerships and may opt to leave for a competitor. Ford has a plan to revive its luxury brand, and its resurgence has begun. Here’s a look at numbers released Tuesday.
Lincoln the “has-been”
It’s hard to believe that 15 years ago Lincoln was actually the top-selling U.S. luxury brand with its Navigator one of the nation’s most popular luxury rides. Unfortunately it’s been a long fall from the top, and this year Lincoln’s sales through June total 38,288, which is down 8.8% from last year, a decline due mainly to the three-month delay in MKZ sales.
To put Lincoln’s nearly 40,000 in sales year to date in perspective, consider that it represents just 3% of Ford’s entire company sales. Ford Motor Company (NYSE:F)’s Focus, Fusion, and Escape sold more than three times Lincoln’s total sales individually. Even uglier, the F-Series has already sold nine times the amount of Lincoln’s entire brand this year.
I suppose that isn’t fair, comparing the mass-produced vehicles of Ford’s Blue Oval brand to its luxury brand. But it does put in perspective how far it has to go to become relevant again – which is one of Ford’s top priorities.
If you want to compare apples to apples, take a look at General Motors Company (NYSE:GM)’s Cadillac brand which is enjoying a 14.9% sales increase in June, assisting the luxury brand’s fastest growth since the disco days of 1976. GM delivered over 83,679 Cadillac’s this year for a 33.2% gain, compared to Lincoln’s 38,288 as previously mentioned.
Ford Motor Company (NYSE:F) investors, fear not: Lincoln’s resurgence is slightly behind Cadillac’s – similar to how General Motors Company (NYSE:GM)’s entire resurgence is years behind Ford’s. We’re seeing a strong uptick in MKZ sales – Lincoln’s flagship vehicle – this quarter representing its best quarterly performance ever.
The MKZ is the first of multiple vehicle redesigns or launches that will, Ford hopes, bump Lincoln’s lineup back to relevancy. Keep in mind that these Lincoln sales don’t cannibalize from typical Ford consumers, so any sales are purely incremental to Ford Motor Company (NYSE:F)’s top and bottom lines.