Lincoln gets low-priced rivals in limousine wars
Chrysler, Toyota and Hyundai see opportunities
That black chauffeur-driven sedan you see picking up a trio of businesspeople at the airport may soon be a Chrysler or Toyota instead of a Lincoln Town Car.
The face of the livery business is changing this year. Even the Korean automakers want a piece of the action.
Lincoln has dominated the small, though high-profile, "black-car" sedan segment over the past two decades. The brand has controlled about three-quarters of sales to livery operators and coachbuilders, mainly with the Town Car, industry sources say.
But with the big, rear-wheel-drive, V-8-powered sedan gone from Lincoln's lineup -- replaced with a re-engineered MKT crossover -- other luxury brands see opportunities. Meanwhile, Chrysler, Hyundai and Toyota are jumping in with lower-priced sedans.
Executives at the three new competitors say livery operators prefer sedans to crossovers. And they point out that their sedans cost about $10,000 less than the Town Car's livery replacement.
Sedan vs. crossover
"It is probably the widest open fleet-vehicle market that we have ever seen in the industry, with more players than ever before," said Martin Romjue, editor of Limousine, Charter & Tour magazine, a trade publication. "The predominant vehicle has gone away and has been replaced with something that is distinctively different. It is a crossover that is succeeding a sedan."
Over the past decade or so, the combined livery and limousine market has averaged about 5,000 vehicles a year, including cars and SUVs stretched into limousines.
With the Town Car's demise last August, Lincoln took steps to protect its turf. Portions of the MKT were re-engineered to compete in the livery business. All-wheel drive is standard with the 3.7-liter V-6, and the second seat was moved back 1.5 inches for better legroom. The livery model and the version for coachbuilders who turn them into limousines is called the MKT Town Car. It goes into production this month.
"The MKT Town Car is purpose-built," said Gerald Koss, Ford Motor Co. fleet marketing manager.
As for sedan vs. crossover, Koss said Lincoln is giving the industry the vehicle it wants.
"We did quite a few focus groups with operators, coachbuilders and then user customers to make sure which vehicle was going to best meet their needs," Koss said.
A sedan was considered, but "the consensus was that the MKT was the best product to meet the needs of the industry," he said.
The MKT Town Car's cargo space is about 40 percent larger than the outgoing Town Car. The crossover is taller than a sedan, making passenger ingress and egress easier, he said.
Still, a Chrysler spokesman said the Chrysler 300 Limited displayed last month at the International Limousine, Charter & Tour convention in Las Vegas "attracted a lot of interest." One reason: The 300 is rwd, which is favored by some operators.
Toyota is promoting the Avalon to livery business operators and Hyundai is pitching its Genesis. But the 300 Limited, Genesis and Avalon are retail units that have not been modified for livery use. Instead, the three contenders' talking point is price, with sticker prices in the $30,000-$35,000 range before rebates or fleet discounts.
Hyundai told attendees at the convention that the Genesis sedan carries a $3,500 incentive.
"They are essentially creating a new tier in pricing," Romjue said. "I think operators are taking that very seriously. You get quality vehicles at a lower price. That lowers your overhead."
In contrast, the MKT Town Car is priced in the $40,000-$45,000 range. Cadillac has not yet set a price for the XTS sedan that goes on sale in the second quarter and will be offered to livery operators.
Toyota is relaunching the Avalon, which was introduced at the 2011 convention. Production was limited last year by a parts shortage caused by the earthquake and tsunami in Japan and flooding in Thailand.
"The livery owners are very upset" with Lincoln's MKT Town Car; Navigator L, an extended-length Navigator SUV; and MKZ hybrid luxury sedan, said Mark Oldenburg, Toyota Motor Sales U.S.A. national fleet marketing, mobility and strategic planning manager. "They don't feel that they meet their needs very well and they are more expensive."
The Avalon's livery version stickers for $32,630, including shipping.
But Koss does not seem worried about the threat from Chrysler, Hyundai and Toyota.
"We have developed relationships with owners, operators and customers," he said. "We have been the market leader for years. We are confident that the MKT Town Car is going to continue that leadership position."