Florida Lincoln dealer: 'I'm thrilled but stunned'
Rivals gone, Treasure Coast retailer views his wider territory with hope, worry
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As recently as last summer, five Lincoln dealerships dotted the 140-mile stretch of Florida's affluent Treasure Coast between West Palm Beach in the south and Merritt Island near the Kennedy Space Center.
Today there is just one: Wallace Lincoln in Fort Pierce, owned by Wallace Automotive Group of Stuart, Fla., 15 miles away. Nobody is more amazed at how rapidly the landscape changed than owner Bill Wallace.
"Was I surprised those other guys threw in the towel? I was stunned. I'm thrilled but stunned," says Wallace, who consolidated his two stores into one as part of the downsizing. Three other dealers returned their franchises to Ford Motor Co., which offered settlements.
The rapid drop in Lincoln's dealer count in that east Florida market is part of a nationwide trend that has left surviving dealers such as Wallace with opportunities and challenges.
Lincoln's national dealership consolidation rolled out over the past couple of years, picking up after the automaker said in June 2010 that it would kill the Mercury brand. Lincoln has exceeded its downsizing goals so far.
Lincoln says that by the end of 2011, it had cut 35 percent of its dealers in the top 130 luxury markets. Lincoln started with about 500 dealerships in those markets. Now there are fewer than 325.
 | Wallace: "It's not easy to be a Lincoln retailer these days." |
'Infinitesimal' profits
Previously, profits at Wallace's two stores had been "infinitesimal" on sales of about 12 cars a month, half what he would have liked. Now he thinks he has a chance to sell enough Lincolns to make a healthy profit.
But he also must cover a huge territory, with a population of 500,000, where rival luxury brands' stores outnumber his. And until new Lincoln vehicles arrive over the next two years, he must win over new customers with the current slow-selling vehicle lineup.
Lincoln has promised seven new or refreshed vehicles by 2014. The first of those -- refreshed versions of the MKS sedan and MKT crossover -- arrive this spring with a toned-down version of Lincoln's waterfall grille atop new chassis technology. But the Lincoln MKZ sedan, sporting a new design look including a horizontal wing-style grille, won't arrive until late this year.
"The reality is we have a pretty unexciting line of cars and we're not terribly aggressive in our price and our offers," he says. "It's not easy to be a Lincoln retailer these days."
Three other dealers also returned their franchises to Ford: Napleton's Northlake Lincoln in Palm Beach, Vero Beach Lincoln and Osman's Lincoln of Melbourne.
Wallace believes the consolidation happened so easily because some other dealers didn't believe a slipping Lincoln could turn itself around fast enough. The brand finished 2011 with U.S. sales of 85,643, behind luxury rivals Mercedes-Benz, Lexus, Cadillac, Acura, Audi, Infiniti and the segment leader BMW, which sold 247,907.
Bruising battles
David Williamson, who reached the painful decision to return his family's Vero Beach Lincoln franchise last summer, said he had endured enough bruising battles with carmakers. First he lost his Jeep franchise when his Vero Beach store was one of 789 dealerships rejected by Chrysler during its 2009 bankruptcy. Then Ford killed Mercury at the end of 2010, leaving him with Lincoln. His family had owned the Lincoln dealership since 1975 and had been Ford dealers since 1911.
"We were already into very, very harsh economic times last summer, probably the worst since I've been in Vero Beach. It's emotional. It's tough," he said.
But Williamson credited Ford for "standing tall" and offering him a fair deal for the franchise. On the day he and his brother Bill decided to sell, they received a letter from Ford CEO Alan Mulally thanking the family for its 100 years serving Ford. Now the Williamson family will continue the business as Thrifty Car Sales of Vero Beach, a used-car franchise.
Ed Napleton, owner of the former Napleton's Northlake Lincoln, said his decision to give up Lincoln was not that difficult. "They paid me a considerable amount of money to resign and I did," he says. "I think the brand's going to be good."
Cautiously optimistic
As part of the downsizing, Wallace agreed to consolidate his Lincoln stores in Stuart and Fort Pierce. In exchange Lincoln will help him pay for a $2 million renovation of the Fort Pierce location to the brand's guidelines. Wallace, cautiously optimistic, hopes to have the renovation finished by the annual influx of snowbirds next fall.
But he worries about Lincoln's new direction. He fears the brand will abandon its current customers in its eagerness to lure the new and younger "culturally progressive luxury customers" it says it wants. And while the closure of those other stores may mean their customers will turn to his dealership, many of those customers will now have to travel farther to a Lincoln store.
"Now we're asking them to be inconvenienced. We're asking them to travel across the next county line. We need to make it attractive for them to do that," he says.
Wallace believes Lincoln's new management is headed in the right direction. He's optimistic about the wave of new products, and likes the looks of the MKZ Concept shown at the Detroit auto show. But, he frets, "We hope we have some customers left by the time it gets here."
| Luxury face-off | |
| Number of luxury brands' stores along a 140-mile stretch of Florida's east coast | |
| Brand | Stores |
| Cadillac | 5 |
| BMW | 2 |
| Lexus | 2 |
| Mercedes | 2 |
| Lincoln | 1 |
You can reach Bradford Wernle at bwernle@crain.com.
