Pare it down or beef it up?
|Jesse Snyder is senior writer for Automotive News|
It finally happened. Lincoln is now just a rounding error for Ford Motor Co.'s U.S. sales. In April, Ford brand sales fell 5 percent, the same percentage as FoMoCo's total. Lincoln lost 13 percent, but it's too small -- and too alone -- to affect the corporate number.
Lincoln's sold 6,308 units in April, not even 1/27th of Ford Motor's total. That's Ford 96.5 percent, all other brands 3.5 percent. Lincoln is Ford's last other brand, the remnant after Mercury was axed and Volvo, Jaguar, Land Rover and Aston Martin were sold. Most of the last decade, those other brands added half to two-thirds of a million units, roughly 17 percent, to Ford's U.S. volume.
It's an odd industry. As some automakers such as Ford are cutting back and focusing, others are adding offshoots and spreading themselves out in search of growth.
Ford pared down to focus on its one core brand, and arguably that has worked well for it.
General Motors took the same approach. Now four core brands instead of nine a decade earlier, when those now-shed parts provided 21 percent of U.S. volume.
The proof is not in sales, which are much lower, but in profits. Today's Ford and GM are healthier financially.
So how come Toyota, Volkswagen and Chrysler keep adding brands?
The once-cozy VW-Audi combo has swollen in recent years far beyond Skoda and Seat, with Bentley, Lamborghini, Bugatti and Porsche (VW and Porsche continue the family squabble about which is corporately on top). VW controls truckmakers Scania and MAN and Audi just bought motorcycle maker Ducati.
Toyota, not content with Lexus on top and Scion down low, is turning Prius from a nameplate into a quasi brand, with three models.
But Chrysler Group? Didn't it just kill Plymouth so core brands Chrysler, Dodge and Jeep could make it? Does it need Fiat, Ram and now SRT as added brands?
GM and Ford have only six brands between them. Can Chrysler sustain six itself?
Actually, maybe it can. Fiat is a natural import brand: all things Italian.
You can debate Chrysler's decision to split Dodge into car-crossover and truck brands. And to turn the SRT trim level into a performance brand with its own dedicated staff and a CEO reporting to CEO Sergio Marchionne.
But neither move cost much. Virtually all U.S. dealers handled Chrysler, Dodge and Jeep. Adding Ram cost dealers an extra sign, not much else. Dealers don't have to buy an SRT sign.
I still have doubts about the wisdom of diluting advertising among six brands. But Chrysler is avoiding all the brand-building hoopla and duplicated dealer bodies that got Ford and GM into trouble during their brand extension mania.
You can reach Jesse Snyder at email@example.com.