The upside of MKZ delay: Quality counts

ORLANDO -- Lincoln dealers say they're impressed by the brand's efforts to get the 2013 MKZ's quality right, even though many still have not received the redesigned sedan.

The Lincoln MKZ has been delayed nearly three months, and Lincoln has launched a new quality inspection process. Lincoln expects the MKZ pipeline to dealers to be full by April, dealers were told.

Matt VanDyke, Lincoln global director of marketing, sales and service, told reporters after the make meeting here that dealers "understand our commitment to quality." But he also admitted, "They're frustrated we didn't deliver it sooner."

Don Chalmers, owner of Chalmers Capitol Ford-Lincoln in Santa Fe, N.M., said that not having enough cars to keep up with demand "is a high-class problem to have."

Lincoln is compensating dealers for lost MKZ sales by offering a lump-sum payment based on a calculation of MKZ sales in relation to their total sales in 2012. In addition, Lincoln is offering spiffs on two other models with adequate supplies: the MKS and MKX.

Lincoln also told dealers it will do a better job of communicating where their built orders are in the system.

Bill Knight, owner of Bill Knight Lincoln in Tulsa, Okla., and chairman of the Lincoln National Dealer Council, said, "Many dealers responded very positively to the last round of support actions. It was clear the dealers appreciated the unprecedented actions on behalf of the company to help those most affected by the MKZ delay."

Mike Shad, owner of Bozard Ford-Lincoln in St. Augustine, Fla., said he had not received his first MKZ. But he said he's satisfied with Lincoln's commitment to get the quality right before shipping.

He was surprised to hear that Lincoln is paying dealers to compensate them for the sales they theoretically have lost because of the MKZ's late arrival. "I never heard of that before," he said.

"Lincoln is a minor part of my business," compared to Ford-brand sales, he said. He sold 23 Lincolns in December but averaged eight to 10 per month last year. "We hope to double that this year," he said.

Larry Stovesand, dealer principal of Paducah Ford-Lincoln in Padu- cah, Ky., said he had been full of misgivings before the meeting, but his mood changed when he heard Lincoln officials outline details of its plans for handling off-lease vehicles.

The brand wants dealers to take more off-lease Lincolns, rather than sending them to the auctions, in an effort to support residual values. But at the same time, Lincoln officials assured dealers, that effort won't entail making Lincoln dealers overpay customers for vehicles coming off lease.

"I came with blood in my eye," Stovesand said. "I was really concerned about forcing us into buying the lease turn-ins at a predetermined price."

But then, "I heard the guy say, 'We understand this and we're going to match them up to what the actual auction price is.' If what he's saying is true -- and I have no reason not to believe it -- now I'm thinking it's a fair deal.

"They were very candid. I feel much better right now than I did when I walked in."

Larry P. Vellequette contributed to this report