Lincoln backs off 2020 target amid trade war

LOS ANGELES — Lincoln Motor Co. no longer is aiming for a goal of 300,000 annual sales globally by the end of the decade, as the brand increasingly focuses on profits over volume and President Donald Trump's trade war with China hinders sales in that market.

Lincoln President Joy Falotico told Automotive News last week that, "with the tariff situation, the instability of that, I don't think that's something we're gunning for right now." The goal was set in 2014 under then-CEO Mark Fields and touted repeatedly before Falotico took charge of the luxury brand last March.

More recently, she said, Lincoln has emphasized "healthy sales," which has meant pulling back on less-profitable fleet deliveries and ensuring inventories are, if anything, slightly too lean to avoid needing lot-clearing discounts.

That has contributed to a 9.6 percent decline in U.S. sales for Lincoln this year through October, while overall luxury volume is down 0.5 percent.

In China, multiple unforeseen challenges have arisen since Lincoln entered the market four years ago. Industry sales growth has slowed, and China in July raised tariffs to 40 percent on imported goods, including vehicles, in retaliation for the Trump administration's charges on China-built goods sold in the U.S.

Lincoln plans to start building vehicles in China in 2019 but currently gets all dealer inventory from the U.S.

"You're not going to be racing for volume when you have a significant change in the price equation there," Falotico said in an interview at the Los Angeles Auto Show.

Fields set Lincoln's 2020 sales goal as he was jump-starting its revival with a $5 billion investment. The brand's global sales have increased from about 100,000 in 2014 to 188,383 in 2017.

Falotico, who unveiled the three-row Aviator crossover here last week, did not discount eventually reaching the 300,000 threshold.

"We do like the upward potential with Aviator, we're very pleased with receptivity to Navigator, and it's great to see Continental up year-over-year in China," she said, "but I think with the challenges we're having in the business, that could probably be pushed out."