Lincoln's $1 million makeover ultimatum
Large-market dealers urged to renovate or step aside
DETROIT -- Ford Motor Co. is turning up the heat on Lincoln dealers to spend at least $1 million to renovate showrooms within the next two years.
The process of rebuilding Lincoln starts now, Ford CEO Alan Mulally told dealers at a Detroit meeting last week.
A group of 120 Lincoln dealers had been invited to the meeting to hear Ford's plans to rebuild its remaining luxury brand, say dealers who attended.
Ford expects stand-alone Lincoln dealers to spend an average of $1 million on renovations, dealers say. Owners of Ford-Lincoln duals are expected to spend about $1.9 million to remodel, dealers who went to the meeting say.
If dealers do not invest in renovations, Ford says it will seek to take back their franchises in exchange for compensation. The investment requirement applies only to urban dealers -- for now.
"Every dealer is different and has different levels of renovation," said a dealer who attended the meeting and asked not to be named. "That's a ballpark average of what has to be done out there."
Dealers who choose to continue selling Lincolns must start remodeling by the end of this year and must be finished by the end of 2013, Ford told the dealers. That's when Ford plans to launch a redesigned MKZ sedan and a small crossover based on the platform that underpins the Ford Focus, dealers say.
Lincoln spokesman Christian Bokich said last week: "We talked about the product and the experience and our commitment to make Lincoln a world-class luxury brand. We have seven new or significantly refreshed vehicles coming out in the next three years."
Ford intends to increase Lincoln's U.S. sales from almost 86,000 units a year in 2010 to 162,000 by 2015, dealers say they were told at the meeting. Lincoln will reach the sales goal based on U.S. projected market growth and those new and improved products. That's why Ford wants Lincoln dealers to spend millions to remodel now.
"Mulally said: "We're asking you to trust us a little bit, just like we asked you to trust us five years ago with the Ford brand. The whole process is starting right now,'" said another dealer at the meeting who also asked to not be named.
Ford wants to whittle down its dealership count, particularly in the top 130 markets. Those markets hold about 55 percent of Lincoln's business, a dealer said.
In October, when Ford first told Lincoln dealers of its plans to rebuild the brand, it had about 500 Lincoln dealerships in the top 130 U.S. markets. At the end of February, Ford said that it had 434 stores, and its goal by year end was to be at 325.
"We still have a plan to have 325 stores by the end of this year," Bokich says. "We are on plan, but we're not in a position to give an update."
At the end of February, Ford had 1,100 U.S. Lincoln dealerships, including small-market stores.
Ford will freshen the MKS sedan and MKT crossover next year. The 2013 MKZ sedan will be redesigned and will offer a 2.0-liter direct-injection turbocharged EcoBoost engine. Ford says the 2013 MKZ Hybrid will get 47 mpg city, up from 41 mpg city for the 2011 MKZ Hybrid.
The redesigned 2013 MKZ moves to Ford's global mid-sized platform. It was designed by Max Wolff, Lincoln's design chief, who was hired from Cadillac late last year.
Dealers who saw the 2013 MKZ say it's dramatically different from the current model. It has the Lincoln waterfall grille but with more European front and rear design cues reminiscent of Aston Martin and Volvo.
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